<P> The primary motivation for creating the Federal Reserve System was to address banking panics . Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes". Before the founding of the Federal Reserve System, the United States underwent several financial crises . A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913 . Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system . </P> <P> Current functions of the Federal Reserve System include: </P> <Ul> <Li> To address the problem of banking panics </Li> <Li> To serve as the central bank for the United States </Li> <Li> To strike a balance between private interests of banks and the centralized responsibility of government <Ul> <Li> To supervise and regulate banking institutions </Li> <Li> To protect the credit rights of consumers </Li> </Ul> </Li> <Li> To manage the nation's money supply through monetary policy to achieve the sometimes - conflicting goals of <Ul> <Li> maximum employment </Li> <Li> stable prices, including prevention of either inflation or deflation </Li> <Li> moderate long - term interest rates </Li> </Ul> </Li> <Li> To maintain the stability of the financial system and contain systemic risk in financial markets </Li> <Li> To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system <Ul> <Li> To facilitate the exchange of payments among regions </Li> <Li> To respond to local liquidity needs </Li> </Ul> </Li> <Li> To strengthen U.S. standing in the world economy </Li> </Ul> <Li> To address the problem of banking panics </Li>

2. what are the main functions of the federal reserve system