231,539 views
18 votes
18 votes
Which type of banking system did the Federal Reserve Act of 1913 establish?

A. A system composed of twelve privately owned regional banks that were regulated by the Federal Reserve Board
B. A system composed of twelve small privately owned banks that were not subject to federal oversight
C. A system consisting of multiple state-owned banks that were subject to oversight by the State Reserve Board
D. A system consisting of a large national bank publicly run by the federal government

User Angella
by
3.1k points

2 Answers

17 votes
17 votes

Answer:

Each of twelve regional districts has a Federal Reserve Bank.

Step-by-step explanation:

User Yuriy Alevohin
by
3.0k points
19 votes
19 votes

Answer:

A. A system composed of twelve privately owned regional banks that were regulated by the Federal Reserve Board

Step-by-step explanation:

The Federal Reserve System ( popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.

Generally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America.

Hence, the type of banking system that the Federal Reserve Act of 1913 establish is a system composed of twelve privately owned regional banks that were regulated by the Federal Reserve Board.

Like all central banks, the Federal Reserve is a government agency that is saddled with the following responsibilities;

I. The Fed controls the issuance of currency in United States of America: it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.

II. It provides banking services to all the commercial banks in the country because the Federal Reserve is the "lender of last resort."

III. It regulates banking activities in the United States of America: it has the power to supervise and regulate banks.

Also, the Fed is saddled with the responsibility of selling government securities such as treasury bills to the public.

User Kyle Humfeld
by
3.1k points