Who We Are, What We Do
Why the Fed Was Created
Congress created the Federal Reserve in 1913 to encourage stability in the nation’s monetary and financial system. The Federal Reserve is made up of 12 Reserve Banks spread across the country and the Board of Governors, located in Washington, D.C., which provides central oversight of the system.
The Fed’s goals
The Fed sets monetary policies that promote an economy in which:
- Most people looking for work are gainfully employed
- Prices for goods and services are, on average, relatively stable
These two goals are often called the Fed’s “dual mandate.” To encourage economic growth and stability and meet this dual mandate, the Fed:
- sets monetary policy;
- ensures the safe functioning of financial institutions and the payment system;
- acts as a bank for banks and the U.S. government;
- acts as a “lender of last resort” to provide liquidity when markets are disrupted.
What we do
The 12 Reserve Banks each have things they do in their own regions and for the overall economy. Each Reserve Bank’s president participates in the meetings of the Federal Open Market Committee (FOMC). The FOMC sets monetary policy for the United States.
Reserve Banks also:
- supervise and regulate financial institutions in their Districts;
- keep enough currency and coin in circulation to meet public demand;
- provide check clearing services for banks and the U.S. Treasury;
- process electronic payments for banks and the government;
- produce research and analyze data on the regional, national, and global economy;
- carry out research and initiatives to ensure fair access to credit and inclusive economic growth.