Banking system

FEDERAL RESERVE BANK

The Federal Reserve, the Central Bank of the United States, was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve System is divided into 12 districts, collectively serving as the nation’s Central Bank. The Federal Reserve is considered to be an independent central bank. It is so only in the sense that its decisions do not have to be ratified by the President or anyone else in the executive branch of government. The entire system is subject to oversight by the U.S. Congress because the Constitution gives to Congress the power to coin money and set its value, a power that in the 1913 act, Congress itself delegated to the Federal Reserve. The Federal Reserve must work within the framework of the overall objectives of economic financial policy established by the government, and thus the description of the system as “independent within the government.”
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