The Federal Reserve is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible and more stable monetary and financial system. The Federal Reserve was created on December 23, 1913, with the signing of the Federal Reserve Act by President Woodrow Wilson. Today, the Federal Reserve's duties fall into four general areas: conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices, regulating banking institutions to ensure the safety of the nation's banking and financial system and to protect the credit rights of consumers, maintaining the stability of the financial system and providing certain financial services to the U. S. government, to the public, to financial institutions and to foreign official institutions.

The structure of the Federal Reserve was designed by Congress to give it a broad perspective on the economy and on economic activity in all parts of the nation. It is composed of a central government agency (Board of Governors) in Washington D. C. , 12 regional Reserve Banks, located in major cities around the nation. The Federal Reserve's income comes from the interest on U. S.

government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments. Once the Federal Reserve has paid its expenses, it then turns over the rest of its earnings to the U. S. Treasury. The Federal Reserve's accountability is to Congress.

Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives and twice annually on its plans for monetary policy to the banking committees of Congress. To ensure financial accountability, the financial statements of the Federal Reserve Banks are audited annually by an independent outside auditor.