The United States took over a hundred and twenty years to prefect a working banking system that could adequately adjusts to the constantly changing economy. The Federal Reserve System most important purpose is to preserve a stable economy in the US. The focus on monetary policy is to protect the purchasing power of the dollar and to encourage conditions that promote sustainable economic growth and high employment. The Federal Reserve System is a network of committees working together to ensure a productive unified monetary policy for the United States that is flexible with the ups and downs of in the business. This network oversees the banking industry to protect the security of the monetary policy.
             At the birth of the Nation there was a need for one central bank to oversee and control all the banks in the United States. The Bank of the United States was given a charter to be the first central bank by Alexander Hamilton in 1791. Due to the longstanding mistrust farmers held for the banking industry, the idea of one bank holding such immense power was not well received and when the twenty-year charter was due for renewal in 1811, the United States Congress voted it down. Recognizing the need for a central banking authority, the United States Congress voted to begin the Second Bank of the United States in 1816. Much like the Bank of the United States, the Second Bank of the United States was given a twenty-year charter. It was more powerful than the previous central bank and was not only supported, but was met with significant opposition by the citizens of the United States. Its charter was allowed to expire in 1836 (Andelman 48).
             The U.S. banking systems proved to be unable to respond adequately or flexibly to the variances in business cycles. Under the National Bank Act of 1864, the country's banking system was divided into three groups: central reserve city banks, reserve city, and country banks. The central...