The Federal Reserve is not Federal and has no Reserves. The existence of a central bank occurred 3 times previous to our current one and failed each time. The accepted opinion of the Fed is that it resides to stabilize our economy. The results since 1913 when it was created show it has failed miserably.
Since the Federal Reserve was created, it has presided over the market crashes of 1921 & 1929, the Great Depression of 1929-39, the recessions in 1953, 1957, 1969, 1975, and 1981, "Black Monday in 1987, the dotcom bubble in 2000 and recession of 2001, and the real estate bubble and Great Recession we are currently experiencing. And don't forget ...the 1000% inflation which has destroyed 90% of the dollars purchasing power since 1913. If that is not failure, I'm not sure what is. So don't believe the mainstream press and politicians who will have you believe the Federal Reserve's role is to stabilize our economy. Sure, it is one of the goals. However, it's primary objective is to serve commercial interests. If you look up the definition of a cartel, then learn who was behind the creation of the Federal Reserve and how it operates, you'll understand the Fed's true objective. It sounds crazy. But it's all been written about, but just totally ignored.
The Fed has the ability to stabilize the economy but it's not its primary objective. The Fed in its current form was created to serve the interests of major commercial interests by allowing the money supply to become more elastic which creates the need for financing and ultimately, a reliance on large commercial interests.
There is no free ...market discipline when the banking system is allowed to create money out of nothing versus having to make wagers against its actual capital. If banks were forced to take responsibility for it's actions, it would mean bankruptcy for not managing money properly and not bailout by taxpayer money. Having the endorsement of the government under the guise of protecting the American public allows banks to take risks no other business is allowed to make and have those risks ultimately secured by taxpayers. The Federal Reserve was created to do just this. It ensures the stabilization of the banking industry and allows big banks to become even bigger (which of course means "too big too fail". The reason why the economy is what it is right now is largely due to the market manipulation of the Federal Reserve and its ability to set interest rates and create fiat money that is no longer tied to gold.
FDIC is ultimately a hoax, too. The guise is to protect depositors, but all one has to do is deposit a $100k in multiple accounts in order to get around the system. Furthermore, the FDIC operates on it's own fractional reserve system meaning it doesn't have the money to secure all deposits. If banks, like life insurance companies, were regulated the same way, there would be no need for the "insurance". FDIC ultimately protects the banks from taking large risks with the imaginary money. The loans created by banks from the money created out of nothing (fractional reserve system) ultimately is repackaged and repackaged (also called a "rollover") allowing the banks to continue to earn interest (the life blood of it's business) in order to avoid using the banks own capital to cover the losses, which by the way are losses on money that didn't exist before! If the bank had to actually to use it's own capital, it couldn't possibly take on as much risk as it does. Eventually, though, the scheme ends and borrowers finally realize they'll never pay off the loan. If this happens among too many borrowers, eventually the bank cannot be saved (the fraud is exposed!) and it leads to a bailout and the help of "the lender of last resort" which is the Fed and again the reason why it was created...To ensure that commercial interests can take these risks and if they don't work out, pass it onto the American public.
The history of the creation of the Federal Reserve is an incredible read.
Allow banks to stand on their own two feet. No market manipulation and government backing. Eventually, money will be created from capital instead of debt. Banks would obviously prefer money created from debt since greater elasticity of money lowers competition for the banking industry and creates more opportunity to earn interest.
And know this, when business comes together in order control profits and drive out competition, it is called a cartel. The Federal Reserve is a formal organization, a union of banks, that agree to coordinate prices, marketing, and production of our currency and set rates. It is a cartel but cleverly disguised and the American public is none the wiser.
The more I learn about the Federal Reserve and the banking industry the more I come to think that there is reason why money isn't taught in school. Ignorance is a very powerful weapon.