Describe the history of the Federal Reserve Bank. Include an Essay

Describe the history of the national Reserve Bank. Include an explanation of all the tools the Fed uses to contract and expand the economy using bullion supply and interest rates - Essay Examplehistory of banking in United States suggest that during its emergent stage, Banking runs were common as many banks opened and faltered during small period of time. Based on the increase failures of pecuniary institutions, Congress set up National Monetary Commission to look into it. Commission presented its first financial reform plan to the Congress in year 1912. This plan recommended the establishment of National Reservations Association which would tie up the reserves of commercial banks and could make short-term loans to banks to ensure credit availableness. United States Congress responded to the situation by enacting Federal Reserves get along thus creating Federal Reserve System. President Woodrow Wilson endorsed these recommendations and Federal Reserves Act became a law on Dec 23, 1913 and ply was created (Federal Reserve Bank of Dallas).The primary responsibility of FED is to manage the enough cash supply and credit to sustain the economic growth of the country by containing inflation. The densification and expansion of economy is thus achieved with the help of following two economic variables1) Money turn in Expanding or contracting the economy done the money supply is the most frequent method use by FED to exercise its powers to make changes in the economy. Traditionally called Open market operations, these are the activities through which FED either purchase or mope up the excess liquidity from the economic arranging by issuing securities called T-Bills or Treasury Bills. Similarly when FED wants to expand the economy through money supply, it will purchase the issued T-Bills thus off loading hard currency in the market. This is done primarily for one purpose and that is that through this, FED wants to control the flow of money in the economy. Th e easy availability to the excess money may create inflation in the economy hence have the possible to impact the real growth in the economy.2) Interest rates FED controls the expansion or contraction in the