ECO 100 Week 9 Articles - Principles of Economics- The Federal Reserve

Federal financial regulation in the United States has evolved through a series of piecemeal responses to developments and crises in the markets. This report provides an overview of current U.S. financial regulation: which agencies are responsible for which institutions and markets, and what kinds of authority they have.

United States banking regulation is largely based on a quid pro quo that was adopted in the 1930s in response to widespread bank failures. The government provides deposit insurance, to reduce customers' incentive to withdraw their funds at the first sign of trouble, and in return the banks accept direct regulation of their operations, including the amount of risk they may incur. Bank regulators can...