what is the 1913 federal reserve act 
the 1913 federal reserve act is legislation in the united states that created the federal reserve system 1 congress passed the federal reserve act to establish economic stability in the u s by introducing a central bank to oversee monetary policy the federal reserve is the culmination of several periods of economic tumult in american history earlier in its history the united states formed centralized national banks much to the consternation of its more rural citizens the national banks were typically controlled by large eastern banking powers making them untrustworthy to those outside the area state chartered or free banks took over issuing their own currency backed by gold in 1863 the national banking act was passed allowing for nationally chartered banks again which offered a way of providing a standardized currency backed by united states securities but unstable financial markets in 1893 and 1907 resulted in market crashes and depressions alleviated only by private infusions from j p morgan banking reform became a priority to reassure the populace of the safety of their money in 1912 president woodrow wilson asked for a solution from the house committee on banking and finance a decentralized bank was the answer and was established in the 1913 federal reserve act 2understanding the 1913 federal reserve actthe law sets out the purpose structure and function of the federal reserve system congress can amend the federal reserve act and has done so several times 1before 1913 financial panics were common occurrences because investors were unsure of the safety of their bank deposits private financiers such as j p morgan who bailed out the government in 1895 often provided lines of credit to provide stability in the financial sector the 1913 federal reserve act signed into law by president woodrow wilson gave the fed the ability to print money and policy tools to ensure economic stability 34the federal reserve system created the dual mandate to maximize employment and keep prices stable 5the federal reserve act is perhaps one of the most influential laws concerning the u s financial system the fed systemthe 12 federal reserve banks each in charge of a regional district are in boston new york philadelphia cleveland richmond st louis atlanta chicago minneapolis kansas city dallas and san francisco 6the seven members of the board of governors are nominated by the president and approved by the u s senate each governor serves a maximum of 14 years and each governor s appointment is staggered by two years to limit the power of the president in addition the law dictates that appointments be representative of all broad sectors of the u s economy 7here is the current list of federal reserve board members as of august 29 2022 8910here is the current list of federal reserve bank presidents 6fed powersin addition to printing money the fed received the power to adjust the discount rate and the fed funds rate and to buy and sell u s treasuries 11 the federal funds rate the interest rate at which depository institutions lend funds maintained at the federal reserve to one another overnight has a major influence on the available credit and the interest rates in the united states and is a measure to ensure that the largest banking institutions do not find themselves short on liquidity through the monetary tools at its disposal the federal reserve attempts to smooth the booms and busts of the economic cycle and maintain adequate bases of money and credit for current production levels central banks across the globe use a tool known as quantitative easing to expand private credit lower interest rates and increase investment and commercial activity quantitative easing is mainly used to stimulate economies during recessions when credit is scarce such as during and following the 2008 financial crisis 