Federal Reserve Act of 1913

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Federal Reserve Act of 1913

Federal legislation that established the Federal Reserve System.

Federal Reserve Act of 1913

Legislation in the United States that created the Federal Reserve System. Prior to the Act's adoption, the United States had been without a central bank since the charter of the Second Bank of the United States expired in 1836. This led to a number of panics, including several in the first decade of the 20th century, which led many to believe that a central bank ought to control American monetary policy.

The Act mandated the creation of between eight and 12 Federal Reserve banks 12 ultimately were founded to operate under the guidance of a Federal Reserve Board, whose seven members were appointed by the President. The Act gave the Federal Reserve System the authority to print money, a controversial measure at the time. It further required that all federally-chartered banks belong to the System and purchase a certain amount of stock in the Federal Reserve bank in charge of their particular regions. The Federal Reserve System was ordered to set the monetary policy of the United States, which it does by printing money, selling Treasury securities, and adjusting the discount rate and the fed funds rate. While the Federal Reserve Act has been amended more than 200 times since 1913, it remains the most significant law governing American finances.
References in periodicals archive ?
Heres my question never asked about the Federal Reserve Act of 1913: How much sense does it make for us to give seven nonelected people life-and-death control over our economy and hence our lives?
The Board also approved the applications under section 18(c) of the Federal Deposit Insurance Act and section 9 of the Federal Reserve Act by Sandy Spring Bank, Olney, Maryland, to merge with WashingtonFirst Bank and to establish and operate branches at locations of the main office and branches of WashingtonFirst Bank.
Instead of addressing the root causes of these crises, the Federal Reserve Act reinforced some of them, while dramatically increasing the potential for politically-motivated abuse of monetary policy.
In line with the Federal Reserve Act and Board of Governors policy, Fanning will lead a search committee comprised of non-banking members of the Atlanta Fed's board of directors.
The explicit objectives of US monetary policy, since an amendment to the Federal Reserve Act (section 2A) in 1977, are "to promote maximum employment, stable prices, and moderate long-term interest rates.
Although the Federal Reserve Act does not explicitly mention financial stability as an FOMC objective, it is fundamentally bound together with the achievement of the explicit goals of maximum employment and price stability.
However, the path from an idea of reform to the Federal Reserve Act of 1913 is a complicated one, now told in Roger Lowenstein's America's Bank: The Epic Struggle to Create the Federal Reserve.
One set of conditions permits a foreign bank to establish a branch outside its home state if the establishment and operation of such branch is permitted by the state in which the branch is to be established and the branch limits its deposit-taking to that of an Edge corporation operating under section 25A of the Federal Reserve Act.
The Federal Reserve Act, which President Woodrow Wilson signed into law on December 23, 1913, appointed a Reserve Bank Organization Committee (RBOC) to determine the number of Federal Reserve Districts (at least eight, but no more than twelve) and the location for a Reserve Bank in each District.
A lawyer-turned-entrepreneur, McAdoo helped build New York City's subway system and Hudson River tunnels, served as an employee-conscious and consumer-friendly president of the Hudson and Manhattan Railway, and in 1913 became secretary of the treasury, where he oversaw passage of the Federal Reserve Act.
The bill would also allow the banking regulators to exempt institutions from any statute that touches the banks they regulate, she added, not just the FDIC Act or the Federal Reserve Act.
The year 2013 marked the 100th anniversary of the Federal Reserve Act that created the Fed.
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