The Federal Reserve uses tools like open market operations, reserve requirements, and the discount rate to regulate the nation's money supply.
For regulating the nations money supply
If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.
The ones who controls how many of the dollars are in circulation. "Give me control of a nations currency, and i care not who makes the laws" or something like that, is a famous quote from one of them folks from The Federal Reserve
If the Federal reserve wants to create dollars it buys bonds from the public in the nations bond market. After the purchase the money spent is in the fists of the public. So basically the purchase of bonds by the Fed creates money, thus increasing the money supply. If the Fed sells government bonds the money then is out of the hands of the public thus decreasing the money supply. Reserves are unaffected because managing the minimum reserve for banks is a different tool that the Federal Reserve and the Federal Open Market Committee use to help manipulate the money supply and the value of that supply of money. It is called fractional reserve banking. For more information I would recommend checking out the FOMC website, Central Bank website, and Federal reserve website.
In the United States, the Federal Bank of New York is considered to be the lender of last resort. In world economics several international financial organizations are lenders to nations in dire economic straits.
Federal Reserve
For regulating the nations money supply
The nation's first true central bank was The Federal Reserve.
Federal Reserve
created the federal reserve system
The Federal Reserve controls the nations supply of money and regulates banks. It also makes sure the financial system remains stable and provides financial service to depository, U.S. government, and foreign official institutions.
declare war maintain army and navy coin money regulate trade between states and with foreign nations
created the federal reserve system
They founded what is now called the Federal Reserve system.
Article 1 Clause 3 is known as the commerce clause, it says congress shall have the power to "regulate commerce with foreign nations among other states.
created the federal reserve system -AKG<3
If the Federal Reserve increases the reserve requirement, banks must hold a larger percentage of their deposits as reserves and can lend out less money. This reduction in lending capacity typically leads to a decrease in the overall money supply in the economy. Consequently, it can result in tighter credit conditions, potentially slowing economic growth and increasing interest rates.