1 Jan 1913 Jahr - Federal Reserve Act

Beschreibung:

The central bank system of the United States, created in 1913. The Federal Reserve helps set the money supply level, thus influencing the rate of growth of the U.S. economy, and seeks to ensure the stability of the U.S. monetary system.

Wilson also reorganized the financial system to address the absence of a central bank. At the time, the main function of national central banks was to back up commercial banks in case they could not meet their obligations. In the United States, the great private banks of New York (such as J. P. Morgan’s) assumed this role; if they weakened, the entire system could collapse. This had nearly happened in 1907, when the Knickerbocker Trust Company failed, precipitating a panic. The Federal Reserve Act (1913) made the banking system more resistant to such crises. It created twelve district reserve banks funded and controlled by their member banks, with a central Federal Reserve Board to impose regulation. The Federal Reserve could issue currency — paper money based on assets held in the system — and set the interest rate that district reserve banks charged to their members. It thus indirectly set the money supply level, influencing the rate of growth in the U.S. economy. The act strengthened the banking system’s stability and, to a modest degree, discouraged risky speculation on Wall Street.

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