What was the key reason for the creation of the federal reserve system?

Answer 1

It was supposedly established to stabilize the economy. If you start to look into what's really happened you will find that the money flow has actually been LESS stable since the Fed took over. The current "economic crisis" has the same source of all of the major crises in U.S. history, contractioin of the money supply. The panic of 1907 was caused by a sudden contraction by powerful European banks and this was the excuse for creating the Fed in 1913. The Fed is controlled by the same financial cartel that created the 1907 panic. It is the only institution that could have caused a contraction of the money supply large enough to create the current "crisis". It seems obvious that history has repeated itself.

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Answer 2

Theoretically it was to to bring federal oversight to a largely unregulated banking industry, which had experienced severe booms and busts over the previous century. In fact, the Great Depression occurred after the creation of the Federal Reserve and many economists beileve that mistakes made by the Federal Reserve created or worsened the Great Depression. The Dollar has lost most of its value since the inception of the Federal Reserve. Historcal fact suggests that the Federal Reserve has been a destabilzing force in the U.S. and world economy.

Answer 3

The Federal Reserve System was created to maintain stable prices; it is the goal for any central bank in any country. Price stability is desirable because an uncontrolled rising price level (inflation) creates uncertainty in the economy and hinders economic growth. Leading up to 1913 when the Fed was created, bank runs would happen about every 15-20 years because of sky-rocketing inflation and uncertainty. Currently, our Fed targets inflation to be around 2% each year and if it stays around there, people can have ease about what the future will bring them and they can plan for it.

Answer 4

The Federal Reserve Act of 1914 was created to bring economic order to the nation's banking system and to lessen the influence and power of Wall Street. The Act created 12 Federal Reserve Banks which dealt with banks not people. The Federal Reserve System was owned by private bankers who deposited 6 percent of their capital in it. The President appointed the majority of the directors, who sat in Washington, putting the government, theoretically, in control of the money system. The greatest power of the Federal Reserve System was its control of the discount rate, the level of interest at which money is lent to other banks for lending to private investors and buyers. By raising or lowering the discount rate, the FED could stimulate investment and economic expansion or cool down an overactive economy that threatened to become inflationary, cause financial panic, or lead to a depression.

Answer 5

As a way to control the money supply,and to make consumers slaves to credit.

Answer 6

It was created to prevent future bank failures by regulating the nation's money supply.

Answer 7

to supervise and regulate member banks and help serve the public efficiently.

Answer 8

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Answer 9

to promote economic stability

Answer 10

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