Brief Summary:
The Federal Reserve also known as the the Federal bank or the central bank for The United States was established in 1913 under the Federal Reserve Act. The legislation was passed under the presidency of Woodrow Wilson. Its purpose was to oversee the commercial banks like Chase, HSBC and others to make sure that another crisis like the "Panic of 1907" does not happen. The Federal Reserve controls the amount of currency circulating within the country. It can even cause inflation or the growth of the economy depending on wheather the interest rate is either high or low.
Source: http://www.mint.com/blog/finance-core/a-visual-guide-to-the-federal-reserve/
Thursday, March 25, 2010
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