What did the Federal Reserve Act of 1913 establish?

The Federal Reserve Act of 1913 established the Federal Reserve System, which serves as the central banking system of the United States. Its primary purpose is to provide the country with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve plays a crucial role in regulating and overseeing the banking industry, managing inflation, and influencing interest rates to support economic growth.

The formation of the Federal Reserve System was a response to the financial panics and instability that the U.S. experienced, especially the Panic of 1907. By centralizing banking functions and enabling the government to act as a lender of last resort, the Federal Reserve aimed to stabilize the economy and restore public confidence in the banking system. It introduced mechanisms for more effective control of the money supply and credit, contributing to economic stability.

In contrast, regulating trade, social security benefits, and establishing national banks for state loans do not accurately reflect the goals or achievements of the Federal Reserve Act. The act specifically focused on monetary policy rather than trade regulation or social welfare programs.