What is the Federal Reserve System? The Federal Reserve was founded in 1913 in response to the 1907 major financial panic. Up until this point in US history, the US did not have a concrete currency like today, instead thousands of banks had their own currency, and depending on the stability of the bank, the money was worth more. After the 1907 crisis, several nationally renowned politicians gathered on Jekyll Island and constructed the Aldrich Plan, which outlined the development of the Federal Reserve system. The Federal Reserve serves as the primary authority on monetary policies and matters. Also known as the Fed, the Federal Reserve is intended to serve as a decentralized central bank. The central authority of the US monetary and banking system is the Board of Governors of the Federal Reserve System (McConnell, Brue, & Flynn, 2012, pp. 287-290). The Board of Directors is part of the public sector; Governors are appointed by the president of the United States and are approved by the Senate. Each governor on the Board of Governors serves a 14-year term and is separated so that one member is replaced every two years. In addition to selecting council members, the president also chooses a president and vice president from among one of seven governors. Under the Board of Governors are the 12 Federal Reserve Banks. Each of the 12 banks covers a region of the United States where it is charged with implementing the Council's decision. The policies put in place by the Board of Governors and enforced by the Federal Reserve Banks are implemented to benefit the economy as a whole. When working with financial policies and adjustments, their main goals are to maintain a stable character of the economy... middle of paper... in recent years they have done a relatively decent job of helping to maintain the economy and the inflation. Without the lender of last resort and the Troubled Asset Relief Program (TARP) to bail out failing banks and businesses, the 2007-2008 financial crisis could have been gravely worse. I would still consider us to be in a recovery period and the monetary policies imposed by the Fed could really help towards financial stability and maximum employment. Right now, the Federal Reserve is probably our country's best option for maintaining a stable currency. It is difficult to imagine a monetary system other than the one we have now with the Fed. However, if the Fed were to overstep its limits, I am sure that educated Americans would push for a new system. I consider the Federal Reserve a necessary evil for the stability of our money and our economy in general.