The Federal Reserve System, also known as the Fed, is the central banking system of the United States. Ben Bernanke has served as the Chairman of the Board of Governors of the Federal Reserve since February 2006.

Since its creation in 1913, the Fed has been charged with keeping the country’s money stable, maintaining the money supply, and controlling the interest rates on loans. Another important purpose of the Fed is to address banking panics.

A banking panic takes place when a bank’s customers withdraw the money in their accounts because they believe the bank might lose their money. If a large enough number withdraw their deposits, the bank may collapse.

In times of financial crisis, the Federal Reserve will act as the lender of last resort to the nation’s banking sector. As such, the Fed will lend money to a bank that is near collapse. This protects the bank’s depositors, prevents panic withdrawals, and avoids damage to the nation’s economy.