The Federal Reserve (known informally as "The Fed") was created in 1913 when President Woodrow Wilson signed the Federal Reserve Act into law, which effectively centralized America’s banking system. The Board of Governors is the presidentially appointed governing body.
The Federal Reserve has four basic functions, though it provides a variety of services to the United States Government. First, it influences market conditions by regulating national interest rates. Second, it supervises banking institutions and safeguards consumer credit rights. Third, it attempts to stabilize financial markets that would otherwise undermine the economic stability of the United States. Finally, it offers a variety of financial services to U.S. and internationally recognized foreign institutions.
The Federal Reserve also controls the discount rate (a basic interbank lending rate), and has the power to bail out major corporations, pending congressional approval - a power that is, however, highly contested in the political discourse.
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