Since its creation on December 23, 1913, the Federal Reserve System--which, in generalized terms, is America's central bank--has greatly benefited the United States' economy. Toward that end, the Federal Reserve System has created and maintained many services for both the government and citizens of the United States; these services include the regulation of financial institutions, maintaining of the payments system and consumer protection laws, and conducting and overseeing monetary policy. Only a logical and stable financial network could carry out the aforementioned services, whose principles would adapt to economic issues and crises as they arise.
The Federal Reserve System--which has changed and evolved since its first conception--has several distinctive characteristics that sets it apart from other financial institutions. As mentioned before, it is America's central bank; however, contrary to the cursory implications of the title, the Federal Reserve System is essentially decentralized. The Federal Reserve System is comprised of twelve districts.
These districts were created in an effort to protect the interests of individuals; no one bank of the Federal Reserve System was to become more powerful than another, and each bank was to be held responsible and accountable to local needs. As a result, the dispersal of banks throughout the country ensured those fulfillment of those requisites. However, after the Great Depression, Congress transferred power to the Federal Reserve Board in Washington D.C., which made the Federal Reserve System more of a centralized entity. Nonetheless, private corporations and individuals own shares--similar to stock--in the Federal Reserve System; this allows privately-owned member banks to elect most of the directors and limits the role of the government. These complex attributes that the Federal Reserve System has gained can be accredited to a unified, logical and efficient structure.
The structure of the Federal Reserve System is much like that...