US Money Reserve

Over the years, reserve currencies have dominated the world and paved way for others. Some of the currencies that have been dominant over time include Greek Drachma, Roman denari, Islamic dinar, Venetian ducato and most recently English Pound and the US Dollar. Integrated global economy resulted in the introduction of the reserve currency concept in the mid-nineteenth century. Many industrialized nations started putting their money on gold standards that were first practiced by the British government in the 1860s. Putting the money on gold standards was very necessary as by then Britain was the leading exporting nation of commodity products and center for insurance and the main currency for trade was the sterling pound. Other countries like the USA had to follow suit.
The Federal Reserve System (Fed) is the central banking system of the United States of America. It was created out of the enactment of the Federal Reserve Act of 1913. The enactment was as a result of financial crisis like the 1907 financial panic. Federal Reserve roles and responsibilities had over the years increased and expanded with the evolution of its structures as a result of major economic upheaves like the great depression of the 1930s.
The Federal Reserve Act empowers the Federal Reserve System with three primary responsibilities; they include; offering Maximum employment, offering stable prices of the currency and providing moderate long-term stable prices. Over the years, however, more responsibilities have been placed on the US Money Reserve. They include; supervising and regulating the activities of the commercial bank, offering stability to financial systems and acting as a bank for banks, the US government and official institutions as well as the foreign official institution. Fed also does all the research as to how the economy is faring and publishes the findings in publications like Beige Book.
Fed is managed by a board of director appointed by either the president or the Federal Open market Committee (FOMC), The Federal Reserve Banks located in major states and advisors from privately owned banks. The salaries of the board members are regulated and set by the federal government and the fact that it has members from both the public and private banks makes the interest of both the public and private bank equally represented. The head of Federal Reserve rotates among the heads of New York Fed and other Feds on a one –year terms.
Fed is however not involved in the creation of currency. The making of money is under the jurisdiction of the United States Department of Treasury. Federal Reserve System decision is not influenced by anybody and does not requires approval from the presidency, the executive or other arms of the government like the legislature. Its funding is also not under the consent of the Congress which makes it autonomous.
Inclusion, since its inception, the Federal Reserve System has been the backbone of the US economy offering financial reports to prospective and current investors. It is also responsible for the continued stability of the US economy and the dollar.

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