The Fed

In my own personal opinion, I believe that the Federal Reserve is an asset to this country. An asset is defined as a useful or valuable thing, and that is what the Federal Reserve is. "One of the main functions of the Federal Reserve System is to moderate the peaks and valleys caused by the so called free market of the banks. In good times, banks readily lend money, which increases the money supply thus fueling inflation. In recessions, banks tighten up the credit therefore contracting the money supply causing the economy to spiral down deeper into recession. The Fed, by controlling the reserve requirement for banks, and the interest rates charged to the banks, can keep both situations from becoming extreme" (The Pros and Cons of the Federal Reserve System). "Unlike other federal systems which are mainly controlled by the government and its officials, the US Federal Reserve is a separate body and functions independently from the government. The federal system does not rely on the appropriations given by Congress but operates using its own earnings. This process somehow limits the political influences into the system. The primary function of the system is to create monetary policies that will help achieve the overall goals of the fiscal policies of the President and Congress. It also contributes to the safety and soundness of the financial system. It is the Board’s sole responsibility to set the requirements for depository institutions and approve changes in discount rates proposed by the directors of the Reserve Banks" (The Pros and Cons of the Federal Reserve System). The Federal Reserve was made to satisfy the need for a more consistent and organized banking system which would uplift economic situations of the U.S. along with organizing its monetary matters into a more coherent system, which in turn would uphold the rights of consumers and their businesses ratifications of the Federal Reserve act. Having this type of power, the Federal Reserve System gains control over the interest rates being implemented among State or local Banks as well as to how much money these banks would be retaining as a reserve in their respective domain. Because of this, the Federal Reserve System actually regulates the United States of America in its local and national banks. "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 banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers and maintaining the stability of the financial system and containing systemic risk that may arise in Financial Market s, providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation's payments systems" (The Pros and Cons of the Federal Reserve System). 

Works Cited: "The Pros and Cons of the Federal Reserve System." Subject Money. N.p., n.d. Web.