In today's America, many people have heard of the Federal Reserve, but a portion of Americans do not know the history, structure, or entire function of the central bank. The purpose of the Federal Reserve was to provide the nation with a secure, more flexible, and more stable monetary financial system. Whether or not the Federal Reserve has done so today, or whether it is necessary, is still a matter of debate. For better or worse, the Federal Reserve plays a huge role in our economy. This essay examines the history, structure, and function of the Federal Reserve, as well as discusses some pros and cons of the central banking system we have today. The Federal Reserve today is not the first central bank of the United States. Congress had made two attempts at creating a central banking system that were ultimately unsuccessful. The first attempt was established in 1791 with the mandate to manage the government's money and regulate the nation's credit {ISCED}. This bank was primarily controlled by private investors while a smaller portion was maintained by the federal government. This bank failed because citizens feared its size and believed it was dominated by private interests. After the closure of the first central bank came four years of bank runs and economic instability. Congress, convinced that another central bank would solve these problems, established another central bank in 1816. Although, like the first bank, the Second Bank of the United States was controlled primarily by private investors. The bank's charter expired and the central bank ceased to exist. Once again America was plagued by private currencies, financial instability, and banking panics by commercial banks that held too much power. Then, following a major banking panic in 1907, Congress created... middle of paper... Another disadvantage is that the Federal Reserve can often put private interests before public ones. Lobbying groups and private interest groups can have enormous influence on the Federal Reserve, allowing individuals to benefit the entire citizenry. Furthermore the Federal Reserve is run by people who think more for businesses than for ordinary American citizens, this can leave the Federal Reserve open to internal corruption that leads to choices that benefit private interests rather than public interests.