The first institution with responsibilities of a central bank in the U.S. was the First Bank of the United States, chartered in 1791. Later, in 1816, the Second Bank of the United States was chartered. From 1837 to 1862, in the Free Banking Era there was no formal central bank, while from 1862 to 1913, a system of national banks was instituted by the 1863 National Banking Act. A series of bank runs later provided the impetus for the creation of a more centralized banking system.


The Federal Reserve Board was created by the U.S. Congress through the passing of the Federal Reserve Act (or Owen-Glass Act), signed into law by President Woodrow Wilson on December 23, 1913.


In Lewis v. United States, 680 F.2d 1239 (9th Cir. 1982), the United States Court of Appeals for the Ninth Circuit stated that the "Federal reserve banks are not federal instrumentalities for purposes of a Federal Torts Claims Act, but are independent, privately owned and locally controlled corporations." The opinion also stated that "the Reserve Banks have properly been held to be federal instrumentalities for some purposes."

Another criticism of the Federal Reserve is that it is shrouded in secrecy. Meetings are held behind closed doors, and the transcripts are released with a lag of five years. Even expert policy analysts are unsure as to the logic behind Fed decisions. Critics argue that such opacity leads to greater market volatility, as the markets must guess, often with only limited information, about how the Fed is likely to change policy in the future. The jargon-laden fence-sitting opaque style of Fed communication is often called "Fed speak."

Furthermore, the lag in the release of FOMC transcripts, as well as the extremely limited and carefully worded minutes and statement, leads to the public being unaware of the issues of major concern to the Fed, and leaves it with an inadequate understanding of the logic and rationale behind the decisions. Some argue that this is a concerted attempt to keep Congress and the public at arm’s length, but this criticism has not gained much widespread acceptance.

Some advocate that the Fed should not exist, and that interest rates and money supply should be left to the free market. Advocates of free banking argue that there is no better judge of the proper interest rate and money supply than the market.

A poll conducted in January by Zogby International found 52% of Americans agreed that Congress should consider impeachment "if President Bush wiretapped American citizens without the approval of a judge." About 43% of respondents said they disagreed with exploring impeachment.

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