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The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States.

It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907)

led to the desire for central control of the monetary system in order to alleviate financial crises.^{[list 1]} 

 

Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s

have led to the expansion of the roles and responsibilities of the Federal Reserve System.^[6][11]

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How the Federal Reserve Was Formed (investopedia.com)

 

 

America Before the Federal Reserve

The United States was considerably more unstable financially before the creation of the Federal Reserve. Panics, seasonal cash crunches, and a high rate of bank failures made the U.S. economy a riskier place for international and domestic investors to place their capital. The lack of dependable credit stunted growth in many sectors, including agriculture and industry. Americans early on, however, also did not want a central bank. They saw this as a model based on the Royal Crown and its Bank of England. New America did not want to be made in the image of Britain, and it also favored a more decentralized state-by-state approach to its political economy.