Federal Reserve System

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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. The Federal Reserve is headed by a Board of Governors and a Chairman. The current Chairman is Ben Bernanke, a Republican appointed by President George W. Bush; his predecessor was Alan Greenspan, a Republican appointed by President Ronald Reagan.

One job of the Federal Reserve is to control inflation by regulating the free market.[1] 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.


  • Epstein, Lita & Martin, Preston (2003). The Complete Idiot's Guide to the Federal Reserve. ISBN 0-02-864323-2. excerpt and text search
  • Greenspan, Alan. The Age of Turbulence: Adventures in a New World (2007), memoirs covering his chairmanship 1987-2006 excerpt and text search
  • Greider, William, Secrets of the Temple. (1987). ISBN 0-671-67556-7; nontechnical book explaining the structures, functions, and history of the Federal Reserve, focusing specifically on the tenure of Paul Volcker
  • Hafer, R. W. The Federal Reserve System: An Encyclopedia. (2005). 451 pp, 280 entries; ISBN 4-313-32839-0.
  • Meyer, Lawrence H. A Term at the Fed: An Insider's View. (2004) ISBN 0-06-054270-5; focuses on the period from 1996 to 2002, emphasizing Alan Greenspan's chairmanship during the Asian financial crisis, the stock market boom and the 9-11 Attacks
  • Treaster, Joseph B. Paul Volcker: The Making of a Financial Legend (2004), chairman 1979-87 online edition
  • Tuccille, Jerome. Alan Shrugged: The Life and Times of Alan Greenspan, the World's Most Powerful Banker (2002) online edition
  • Wells, Donald R. The Federal Reserve System: A History (2004)
  • Woodward, Bob. Maestro: Greenspan's Fed and the American Boom (2000) study of Greenspan in 1990s.


  • Broz, J. Lawrence. The International Origins of the Federal Reserve System (1997). online edition
  • Carosso, Vincent P. "The Wall Street Trust from Pujo through Medina", Business History Review (1973) 47:421-37
  • Chandler, Lester V. American Monetary Policy, 1928-41. (1971).
  • Epstein, Gerald and Thomas Ferguson. "Monetary Policy, Loan Liquidation and Industrial Conflict: Federal Reserve System Open Market Operations in 1932." Journal of Economic History 44 (December 1984): 957-84. in JSTOR
  • Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960 (1963)
  • Hetzel, Robert L. The Monetary Policy of the Federal Reserve: A History (2008) from 1913 to 2007; excerpt and text search
  • Kubik, Paul J. , "Federal Reserve Policy during the Great Depression: The Impact of Interwar Attitudes regarding Consumption and Consumer Credit." Journal of Economic Issues . 30#3. 1996. pp 829+.
  • Link, Arthur. Wilson: The New Freedom (1956) pp 199-240.
  • Livingston, James. Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (1986), Marxist approach to 1913 policy
  • Mayhew, Anne. "Ideology and the Great Depression: Monetary History Rewritten." Journal of Economic Issues 17 (June 1983): 353-60.
  • Meltzer, Allan H. A History of the Federal Reserve, Volume 1: 1913-1951 (2004) the standard scholarly history excerpt and text search
  • Roberts, Priscilla. "'Quis Custodiet Ipsos Custodes?' The Federal Reserve System's Founding Fathers and Allied Finances in the First World War", Business History Review (1998) 72: 585-603
  • Romer, Christina D. and David H. Romer. Choosing the Federal Reserve Chair: Lessons from History. The Journal of Economic Perspectives, Vol. 18, No. 1. (2004), pp. 129-162. (jstor)
  • Schull, Bernard. "The Fourth Branch: The Federal Reserve's Unlikely Rise to Power and Influence" (2005) ISBN 1-56720-624-7 online edition
  • Steindl, Frank G. Monetary Interpretations of the Great Depression. (1995).
  • West, Robert Craig. Banking Reform and the Federal Reserve, 1863-1923 (1977)
  • Wicker, Elmus R. "A Reconsideration of Federal Reserve Policy during the 1920-1921 Depression", Journal of Economic History (1966) 26: 223-238, in JSTOR
  • Wicker, Elmus. Federal Reserve Monetary Policy, 1917-33. (1966).
  • Wells, Donald R. The Federal Reserve System: A History (2004)
  • Wicker, Elmus. The Great Debate on Banking Reform: Nelson Aldrich and the Origins of the Fed (2005).
  • Wood, John H. A History of Central Banking in Great Britain and the United States (2005)
  • Wueschner; Silvano A. Charting Twentieth-Century Monetary Policy: Herbert Hoover and Benjamin Strong, 1917-1927 (1999)


  1. http://web.archive.org/web/20070818201731/http://www.peterjaworski.com/Friedman

External Links

Board of Governors of the Federal Reserve System