Expert Answer . Federal Reserve Act for kids: Why was the amendment to the law passed? The system is comprised of 12 regional reserve … what is the federal reserve system and what does the federal reserve do? It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. This decentralized structure ensures that the economic conditions of all areas of the country are taken into account in the making of monetary policy. The complex design of these three parts is actually tied to how the Fed was created in the first place. Their monopoly over the global economy does not end at the edge of the oil patch. The Federal Reserve Act was passed because p ublic confidence in the US banking system was extremely low due to the collapse of small banks during periods of depression in which many Americans had lost their homes, businesses and life savings. The Federal Reserve is the central bank system of the United States that includes the Board of Governors in Washington, D.C., and 12 independent regional Reserve banks. six factor of federal reserve bank. The Federal Reserve, unlike most central banks, is semi-decentralized. According to company 10K filings to the SEC, the Four Horsemen of Banking are among the top ten stock holders of virtually every Fortune 500 corporation. Federal Reserve’s monetary policy is determined by the Federal Open Market Committee (FOMC), which is made up of the seven members of the Board of Governors along with five rotating members from the leadership of the regional banks. Over the years, its role in banking and the economy has expanded. The Fed's mandate is "to promote sustainable growth, high levels of employment, stability of prices to … Previous question Next question Get more help from Chegg. What does the Federal Reserve System do? The Federal Reserve System is the central bank of the United States. Basically, the Federal Reserve is made up of three parts: the Board of Governors—that's the building on the far left; the Reserve banks—the 12 buildings along the right; and the Federal Open Market Committee. Open Market Purchase: The open Market purchase is a process of buying and selling the government securities which is held by the federal reserve to control inflation and money supply. The Federal Reserve was created to serve the public interest, as its functioning Federal Reserve Board of Governors reports to and is accountable to Congress, which … The Federal Reserve Cartel: Who owns the Federal Reserve? The Structure and Functions of the Federal Reserve System. The Federal Reserve System was created by Congress in 1913. The FOMC meets several times a year to discuss and vote on the direction the Fed will take on monetary policy. The Federal Reserve System in the U.S. conducts the nation's monetary policy and regulates its banking institutions. At the national level, it is run by a Board of Governors, consisting of seven members appointed by the President of the United States and confirmed by the Senate.