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Federal Reserve: History, Purposes and Functions - An Analysis

By Mukunda Lakshamanarao


On December 23, 1913, President Woodrow Wilson signed into law the Federal Reserve Act. With this law, Congress established a central banking system which would enable the world’s most powerful industrial nation to manage its money and credit more effectively than ever before. The political and legislative struggle to create the Federal Reserve System was long and often bitter, and this final product in 1913 was the result of a carefully crafted and somewhat tenuous political compromise between national and regional powers. Since its founding, the Federal Reserve System has evolved to meet the needs of a changing financial system and a growing economy, while its unique structure remains its greatest strength. This paper describes the history, structure, and functions of the Federal Reserve System. The Federal Reserve’s role in the international sphere will be examined, as well as its impact on the national economy

Topics: Federal Reserve System, Board of Governors, Federal Reserve Banks, Federal Open Market Committee, FOMC, Open market operations, Repurchase agreements, Discount window loans, Electronic Funds Transfers, EFT, Automated Clearinghouse, ACH, US Treasury, Foreign currency operations, Exchange market intervention, Monetary policy, Reserves market, Federal Reserve Act of 1913, Woodrow Wilson, Carter Glass, Arthur S. Link, Parker Willis, Hebrew bankers, Robert Owen, Paul Warburg, Nelson W. Aldrich, J. Lawrence Laughlin, National Citizens League, Populists, Colonel House, Alan Greenspan, General Electric Company, John F. Welch Jr., Liberalization, Necessary and proper clause, Alexander Hamilton, Thomas Jefferson, Hamilton-Jefferson debate, First Bank of the United States, James Madison, War of 1812, Second Bank of the United States, Henry Clay, Andrew Jackson, McCulloch v. Maryland, National Banking Act of 1863, Country banks, Reserve city banks, Central reserve city banks, Advisory Committee, RPs, Depository Institutions Deregulation and Monetary Control Act of 1980, International banking, FDIC, Bank for International Settlements, BIS, International Monetary Fund, IMF, Organisation for Economic Co-operation and Development, Bretton Woods, Articles of Agreement of the IMF, National Monetary Commission, Susan Phillips, Clinton Administration, Banking and Finance Law, Constitutional Law, International Law, Legal History, Legislation, President/Executive Department, State and Local Government Law
Publisher: Digital Commons @ Georgia Law
Year: 1997
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