Federal Reserve SystemFederal Reserve System
- (US) The central banking system of the United States.
That system is one technical example of fractional reserve banking.
federal reserve system - Investment & Finance Definition
Also called the Fed, the Federal Reserve System is the central bank of the United States, created in 1913. The purpose of the system is to provide a safe, flexible, and stable monetary policy and financial system. It conducts monetary policy by influencing the amount of money and credit available in the financial system. It is charged with pursuing policies that promote full employment and avoid inflation. It also has other duties, which include promoting the stability of the financial system and providing banking services to depository institutions and the U.S. government. It also is charged with protecting consumers from bad banking policies. Twelve regional Federal Reserve Banks, located in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, St. Louis, and San Francisco, are the system’s operating arms. (Eleven of the regional banks are located in the eastern U.S. because that is where the majority of the nation’s population was located when the Federal Reserve System was chartered.)