Congress created the Federal Reserve through a law passed in 1913, charging it with a responsibility to foster a sound banking system and a healthy economy. This remains, today, the broad mission of the Fed and its component parts:
The most important of the Fed's responsibilities is formulating and carrying out monetary policy. In this role, the Fed acts as the nation's "money manager"—working to balance the flow of money and credit with the needs of the economy.
Another important Federal Reserve responsibility is servicing the nation's largest banking customerthe U.S. government. As the government's bank or fiscal agent, the Fed processes a variety of financial transactions involving trillions of dollars.
As part of its mandate to foster a sound banking system, the Federal Reserve supervises and regulates financial institutions.
Each of the 12 Fed Banks provides services to financial institutions that are similar to the services that banks and thrifts provide to businesses and individuals.