NOVEMBER 16

On this date in 1914, the New York regional Federal Reserve Bank opened.  It was one of twelve Federal Reserve Banks to open later that month.  They are part of the Federal Reserve System which controls money in the United States.  The Federal Reserve is commonly known as the FED.

The FED was created to counteract banking crises.  It is the bankers bank and our country's bank.  The FED is controlled by a seven member board which determines at what interest rate they will lend money (the discount rate).  This rate affects the interest rates on all other loans of every kind by every institution.  The board also determines how much money a bank must keep in its vaults relative to its lending exposure (reserve requirements).  This expands or limits how aggressive banks can be with lending money.  Add these two things together and that board has become the most powerful financial entity in the world.  (This is not to the liking of everyone - see Ron Paul.)

The Federal Reserve System is complicated and expansive.  Make yourself aware of what it is and all it does.
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