Number: RL34427
Title: Financial Turmoil: Federal Reserve Policy Responses
Authors: Marc Labonte, Government and Finance Division 
Abstract: One of the original purposes of the Federal Reserve Act, enacted in 1913, was to prevent recurrence of financial panics. To that end, the Fed has been given broad authority over monetary policy and the payments system, including the issuance of federal reserve notes as the national currency. As with any statutory delegations of authority, the Fed's actions are subject to congressional oversight. Although the Fed has broad authority to independently execute monetary policy on a day-to-day basis, questions have arisen as to whether the unusual events of recent months raise fundamental issues about the Fed's role, and what role Congress should play in assessing those issues. This report reviews the Fed's actions since August 2007 and analyzes the policy issues raised by those actions.
Pages: 28
Date: December 4, 2008