Introduction
In the United States, the Federal Reserve System is charged with regulating the country’s monetary policy. The system was implemented after leaders noted the deficiencies in the previous national banking system. The previous system had a currency that was inelastic and there were liquidity problems in the economy. There were a lot of financial panics in the economy caused by the inefficiencies in the system. A republican representative proposed the creation of a centralised banking system that would operate with a minimum level of government involvement. The Federal Reserve System was instituted in 1913. The system was able to solve three ...
