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Bank of Canada Week 8

Some of the previous funcions of the department of

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Unformatted text preview: ssity. The US Federal Reserve System •  The US Federal Reserve System (The Fed)was set up in 1913. •  The Fed was set up in part due to a financial crisis in 1907 (called the Panic of 1907). –  The New York Stock Exchange fell 50% in trading. –  Bank runs were numerous. –  Many regional banks had invested money in the larger NYC banks. When they started to struggle the smaller banks joined the bank runs. –  Many regional banks and businesses declared bankruptcy. –  New York financiers (led my JP Morgan) invested their own money to keep the banking system from collapsing. –  A central bank was needed to prevent this from happening in the future. The US Federal Reserve System •  DuIes of the US Federal Reserve: –  maintain employment –...
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