Federal reserve

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The Federal Reserve System, often referred to as the Federal Reserve or simply "the Fed," is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role has evolved and expanded.

What are the Federal Reserve's responsibilities?

Today, the Federal Reserve's responsibilities fall into four general areas:

  • conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices
  • supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
  • maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
  • providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments systems

For an overview of the Federal Reserve and its responsibilities, see The Federal Reserve System: Purposes and Functions.

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