US Federal Reserve chronology

The Federal Reserve System’s centennial is Monday.

— 1791—1811: First Bank of the United States.

— 1816—36: Second Bank of the United States.

— 1836—63: “Free banking” era.

— 1863—1913: National Banking Act allows chartering of thousands of “national” banks, which issue currency printed by the federal government.

— 1907: Stock speculation in New York sets off nationwide bank run.

Financial panic highlights that the US is the only major country without a central bank.

— 1912: National Monetary Commission recommends banking and currency reforms.

— December 23, 1913: President Woodrow Wilson signs Federal Reserve Act, establishing the central banking system including 12 regional banks, in part to dilute the financial influence of Wall Street.

— 1933—42: Starting in the depths of the Great Depression, a series of legislative changes includes establishment of the Federal Open Market Committee, which sets monetary policy.

— 1951: Fed-Treasury accord clarifies Federal Reserve independent control over monetary policy while leaving fiscal affairs to the Treasury Department.

— 1977: Congress gives Fed so-called dual mandate of maximum employment and stable prices, along with moderate long-term interest rates.

— 1979-87: Fed Chairman Paul Volker targets rampant “stagflation” by hiking interest rates, sparking 1982-83 recession but forging relative price stability for years to come.

— 1987-2006: Chairman Alan Greenspan establishes practice of issuing policy statements after meetings including forward guidance of the Fed’s policy outlook. The longest serving Fed chairman, his every public word is parsed on Wall Street for hints to future interest rates. The Fed steers through the 1987 Wall Street crash and the 1997-98 Asian financial crisis. Greenspan is later criticised for keeping rates too low during the housing bubble preceding the 2008 financial crisis, and for inadequate oversight of bank risk-taking especially in the subprime mortgage market.

— 2006—January 31, 2014: Chairman Ben Bernanke helms the Fed through the 2008 financial crisis, holding benchmark interest rate at unprecedented near-zero since December 2008, along with three rounds of “quantitative easing,” or buying bonds to inject liquidity into markets.

— February 1, 2014: If confirmed by the Senate, Janet Yellen, vice chairwoman of the Board of Governors of the Federal Reserve since 2010, would be the 15th Fed chief and first chairwoman.

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