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ThisNation.com--What is the Federal Reserve and what does it do?
What is the Federal Reserve and what does it do?
Periodically, I hear about the Federal Reserve raising interest rates or lowering interest rates. But what is the Federal Reserve? Is it a governmental body or a private one? Does it just set interest rates or does do other things?
The Federal Reserve is considered an independent central bank. It is independent since its decisions do not have to be ratified by the President or Congress. The Federal Reserve System was created by Congress in 1913 "to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."
"If men were angels, no government would be necessary."
James Madison
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