December 23, 1913. The act statedthat its purposes were “to provide for the establishment of Federal reserve banks, tofurnish an elastic currency, to afford means of rediscounting commercial paper, toestablish a more effective supervision of banking in the United States, and for otherpurposes.”After the implementation of the Federal Reserve, several laws were passed tosupplement it. Some of the key laws affecting the Federal Reserve Act are the Bankingact of 1935; the Employment Act of 1946; the 1970 amendments to the Bank HoldingCompany Act; the International Banking Act of 1978; the Full Employment and BalancedGrowth Act of 1978; the Depository Institutions Deregulation and Monetary Control Actof 1980; the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; andthe Federal Deposit Insurance Corporation Improvement Act of 1991. In two of theabove-named acts, Congress defined the main goals of national economic policy. Theseacts are the Employment Act of 1946 and the Full Employment and Balanced Growth Actof 1978. The main goals of the Federal Reserve are economic growth, a high level ofemployment, stable prices, and moderate long-term interest rates.The Federal Reserve System is considered to be an independent central bank. It isan independent central bank only in the sense that its decisions do not have to be passedby the President or anyone else in the executive branch of the government. The entireFederal Reserve System is subject to oversight by the U.S. Congress because theConstitution gives Congress the power to coin money and set its value. This power tocoin money given to Congress by the Constitution was then passed on to the FederalReserve in 1913. Since the Federal Reserve must work within the confines of the overallgoals of economic and financial policy established by the government, the description ofthe Federal Reserve System as “independent within the government” is a be...
