The Federal Reserve System is the central banking system of the United States. It was created on December 23,1913,with the enactment of the Federal Reserve Act,after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years,events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933,enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation,and bank runs were common. The insurance limit was initially US$2,500 per ownership category,and this has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010,the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States,and according to the FDIC,"since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
The Federal Open Market Committee (FOMC) is a committee within the Federal Reserve System that is charged under United States law with overseeing the nation's open market operations. This Federal Reserve committee makes key decisions about interest rates and the growth of the United States money supply. Under the terms of the original Federal Reserve Act,each of the Federal Reserve banks was authorized to buy and sell in the open market bonds and short term obligations of the United States Government,bank acceptances,cable transfers,and bills of exchange. Hence,the reserve banks were at times bidding against each other in the open market. In 1922,an informal committee was established to execute purchases and sales. The Banking Act of 1933 formed an official FOMC.
Janet Louise Yellen is an American economist,currently serving as the 78th United States secretary of the treasury since January 26,2021. She previously served as the 15th chair of the Federal Reserve from 2014 to 2018. She is the first woman to hold either post,and has also led the White House Council of Economic Advisers. Yellen is the Eugene E. and Catherine M. Trefethen Professor of Business Administration and Economics at the University of California,Berkeley.
The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities,including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods,a practice known as redlining.
Roger W. Ferguson Jr. is an American economist,attorney and corporate executive who served as the 17th vice chairman of the Federal Reserve from 1999 to 2006. Prior to his term as vice chairman,Ferguson served as a member of the Federal Reserve Board of Governors,taking office in 1997. He was the first African-American vice chairman. After leaving the Fed,he served as president and CEO of the Teachers Insurance and Annuity Association of America (TIAA) from 2008 to 2021. Ferguson has also been appointed to the board of directors of several companies including Alphabet.
Alan Stuart Blinder is an American economics professor at Princeton University and is listed among the most influential economists in the world. He is a leading macro-economist,politically liberal,and a champion of Keynesian economics and policies.
The Federal Reserve System,commonly known as "the Fed," has faced various criticisms since its establishment in 1913. Critics have questioned its effectiveness in managing inflation,regulating the banking system,and stabilizing the economy. Notable critics include Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz,who argued that the Fed's policies exacerbated the Great Depression. More recently,former Congressman Ron Paul has advocated for the abolition of the Fed and a return to a gold standard.
Excess reserves are bank reserves held by a bank in excess of a reserve requirement for it set by a central bank.
Ben Shalom Bernanke is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Federal Reserve,he was appointed a distinguished fellow at the Brookings Institution. During his tenure as chairman,Bernanke oversaw the Federal Reserve's response to the 2007–2008 financial crisis,for which he was named the 2009 Time Person of the Year. Before becoming Federal Reserve chairman,Bernanke was a tenured professor at Princeton University and chaired the Department of Economics there from 1996 to September 2002,when he went on public service leave. Bernanke was awarded the 2022 Nobel Memorial Prize in Economic Sciences,jointly with Douglas Diamond and Philip H. Dybvig,"for research on banks and financial crises",more specifically for his analysis of the Great Depression.
Donald Lewis Kohn is an American economist who served as the 18th vice chair of the Federal Reserve from 2006 to 2010. Prior to his term as vice chair,Kohn served as a member of the Federal Reserve Board of Governors,taking office in 2002. Fed's veteran,he retired after 40 years at the central bank,currently serving on the Financial Policy Committee for the Bank of England and as a Senior Fellow at the Brookings Institution.
The Federal Reserve Bank of Kansas City is located in Kansas City,Missouri,and covers the 10th District of the Federal Reserve,which includes Colorado,Kansas,Nebraska,Oklahoma,Wyoming,and portions of western Missouri and northern New Mexico. It is second only to the Federal Reserve Bank of San Francisco in size of geographic area served. Missouri is the only state with two main Federal Reserve Banks;the other is located in St. Louis.
Kevin Maxwell Warsh is an American financier and bank executive who served as a member of the Federal Reserve Board of Governors from 2006 to 2011.
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations,particularly financial institutions,are so large and so interconnected that their failure would be disastrous to the greater economic system,and therefore should be supported by government when they face potential failure. The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing,discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois. The term had previously been used occasionally in the press,and similar thinking had motivated earlier bank bailouts.
Vernon P. "Vern" McKinley,born in East Chicago,Indiana advises governments on financial sector policy and legal issues. He is the co-author with the Wall Street Journal's James Freeman of Borrowed Time:Two Centuries of Booms,Busts and Bailouts at Citi published by HarperCollins in 2018. He is also the author of Financing Failure:A Century of Bailouts,published by the Independent Institute in 2012. He was a primary election challenger to 28-year incumbent Congressman Frank Wolf in northern Virginia's 10th congressional district in the 2008 elections,the only one to ever challenge Wolf in a primary during his long tenure. McKinley lives with his family in Ashburn,Virginia and they have also lived in Kyiv and Yerevan.
James Brian Bullard is the former chief executive officer and 12th president of the Federal Reserve Bank of St. Louis,a position he held from 2008 until August 14,2023. In July 2023,he was named dean of the Mitchell E. Daniels Jr. School of Business at Purdue University.
The government interventions during the subprime mortgage crisis were a response to the 2007–2009 subprime mortgage crisis and resulted in a variety of government bailouts that were implemented to stabilize the financial system during late 2007 and early 2008.
Esther L. George is the former president and chief executive of the Federal Reserve Bank of Kansas City from 2011 until 2023.
Martin James Gruenberg is an American attorney who has been chairman of the Federal Deposit Insurance Corporation (FDIC) since 2023. Gruenberg previously served as FDIC chairman from 2012 to 2018;as well as on an acting basis from 2005 to 2006 and 2011 to 2012.
There have been several efforts or appeals in the United States to reinstate repealed sections of the Glass–Steagall Act following the 2007–2008 financial crisis,as well as elsewhere to adopt similar financial reforms.
