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[[Image:Federal Reserve.jpg|right|thumb|300px|The Federal Reserve headquarters in Washington, DC.]]

[[Image:Federal Reserve.jpg|right|thumb|300px|The Federal Reserve headquarters in Washington, DC.]]

The '''Federal Reserve''' (also known as '''The Fed''') is a central banking system that controls the monetary system of the [[United States]]. Although it acts with the authority of the [[government]], the Federal Reserve is not an official government agency. It was established by the Federal Reserve Act, which was passed by Congress and signed into law by [[President]] [[Woodrow Wilson]] in 1913. Although the [[Constitution]] says that only Congress has the authority to "coin money", the Federal Reserve issues currency that is not based on the original [[gold standard]].<ref>http://www.federalreserve.gov/</ref>  The Federal Reserve is headed by a Board of Governors and a Chairman. The current Chairman is [[Ben Bernanke]]; his predecessor was [[Alan Greenspan]].   

The '''Federal Reserve''' (also known as '''The Fed''') is a central banking system that controls the monetary system of the [[United States]]. It acts with the authority of the government and was established by the Federal Reserve Act, which was passed by Congress and signed into law by President [[Woodrow Wilson]] in 1913.   The Federal Reserve is headed by a Board of Governors and a Chairman, appointed by the president and confirmed by Congress. The current Chairman is [[Ben Bernanke]]; his predecessor was [[Alan Greenspan]].   

The main job of the Federal Reserve is to control [[inflation]] by regulating the [[free market]].<ref>http://web.archive.org/web/20070818201731/http://www.peterjaworski.com/Friedman</ref> One of its main functions is to set the amount of money that banks must keep in reserve and to set the interest rates for money it lends to banks.

One job of the Federal Reserve is to control [[inflation]] by regulating the [[free market]].<ref>http://web.archive.org/web/20070818201731/http://www.peterjaworski.com/Friedman</ref> One of its main functions is to set the amount of money that banks must keep in reserve and to set the interest rates for money it lends to banks.

 

In 2008 the Fed became a major player in many new ways, taking over and rescuing (or not rescuing) many major banks, and making trillions of dollars of guarantees. See [[Financial Crisis of 2008]].  

Federal Reserve banks are located in [[Boston]], [[New York]], [[Philadelphia]], [[Cleveland]], [[Richmond]], [[Atlanta]], [[Chicago]], [[Kansas City]], [[St. Louis]], [[Minneapolis]], [[Dallas]], and [[San Francisco]].

Federal Reserve banks are located in [[Boston]], [[New York]], [[Philadelphia]], [[Cleveland]], [[Richmond]], [[Atlanta]], [[Chicago]], [[Kansas City]], [[St. Louis]], [[Minneapolis]], [[Dallas]], and [[San Francisco]].