Note what stands first in the purpose of the Federal Reserve,
per Wikipedia
en.wikipedia.org
Purpose
The primary motivation for creating the Federal Reserve was to
address banking panics (bank runs). The Federal Reserve
briefly describes the circumstances that led to its creation,
the purpose for creating it, and functions of the system in The Federal Reserve in Plain English:
"Just before the founding of the Federal Reserve, the nation
was plagued with financial crises. At times, these crises led
to “panics,” in which people raced to their banks to withdraw
their deposits. A particularly severe panic in 1907 resulted
in bank runs that wreaked havoc on the fragile banking system
and ultimately led Congress in 1913 to write the Federal
Reserve Act. Initially created to address these banking
panics, the Federal Reserve is now charged with a number of
broader responsibilities, including fostering a sound banking
system and a healthy economy."
The purpose of the Federal Reserve System is formally stated in the Federal Reserve Act:[23]
"To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."
The purpose and functions of the Federal Reserve include:[22][24]
1) to address banking panics (bank runs)
2) to serve as the central bank for the United States
3) to strike a balance between private interests of banks and the centralized responsibility of government
a) supervising and regulating banking institutions
b) protect the credit rights of consumers
4) to manage the nation's money supply through monetary policy
a) maximum employment
b) stable prices
c) moderate long-term interest rates
5) maintain the stability of the financial system and
containing systemic risk in financial markets
6) providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
7) national functions
a) facilitate the exchange of payments among regions
b) strengthen U.S. standing in the world economy
8) regional functions within the nation
a) to be responsive to local liquidity needs |
