Federal Reserve System
The Federal Reserve System is America's independent central bank. Established in 1913 many decades after the last previous central bank was closed down by Andrew Jackson, the system is governed by the Federal Reserve Board, whose seven members are appointed to staggered 14-year terms. The Fed, as the board is known colloquially, today plays a central role in the American -- and indeed the global -- economy by virtue of its control over the world's preeminent currency, the U.S. dollar. The Fed can make the money supply expand or contract -- and help the economy do likewise -- by buying or selling Treasury securities and altering reserve requirements for the nation's banks. Through its influence on interest rates, the Fed has a major impact on the rate of economic growth and the direction of securities markets. The board's chairman is a closely attended figure whose often cryptic pronouncements are widely scrutinized for evidence of the Fed's intentions with respect to interest rates. In recent years the Fed's primary concern, aside from the health of the banking system, has been fighting inflation.