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The Federal Reserve System – Essay Example

The Federal Reserve, sometimes the Fed composes the central bank in the great nation of America. The Congress created the system as a means to supply the nation with a more flexible and secure financial strategy. The creation of the Fedin 1913 followed the presentation of the Federal Reserve Act as the law under President Woodrow Wilson. Through identifying the purpose of the Federal Reserve System, its significance to the U.S. economy is identified.

The Fed regulates the economy and financial system with the role placed in affecting the monetary and credit balance. The Fed supervises the monetary activity through the direct influence on the central bank and financial institutions. This ensures the credibility of transactions conducted in the organizations to safeguard consumer’s rights.

The body maintains the stability within the financial systems to regulate the financial system and increase balance in the financial market. The organization’s leading role realizes the regulation of financial services to the U.S. government’s foreign recognized institutions to complete the nation’s payment system. The Federal Reserve presents the balance to financial transactions and sustains economic relations with the international organizations. This leads to the development of a smooth payment system that recognizes the payment system it presents.

The Fed’s role presents uttermost significance in boosting the economy through monetary transactions. The balance and efficiency of the financial system is maintained through the criteria established in the government branch. The body regulates financial system in America to develop the balance in the monetary policy. Without the central financial institutions, financial systems and government development prospects would not be initiated in a credible strategy. The benefits of the Federal Reserve regulate the balance between International economic relations and established financial institutions. The role in creating the balance in monetary and credit transactions support the booming U.S. economy.