Answer:
The Federal Reserve Act was designed to prevent financial crisis.
Explanation:
The Federal Reserve Act, passed by Congress on December 23, 1913 and signed by President Woodrow Wilson, is the law that created the Federal Reserve System.
Prior to the Federal Reserve Act, the United States had been without a central bank for nearly eighty years. However, after the financial panic in 1907, many financial families felt that banking reform was necessary to create a reserve currency for times of financial turmoil and that could expand and decrease in line with the needs of the national economy.
On the basis of strong recommendations by the bankers, the Aldrich-Vreeland Act was created in 1908. Based on that act, on January 9, 1912, the Commission submitted a report to Congress recommending changes in banking and currency laws. The report was named the Aldrich Plan, after Republican Senator Nelson W. Aldrich of Rhode Island. The plan was to coordinate the actions of twelve regional central banks, the National Reserve Associations, by a national board of commercial bankers. The twelve central banks would provide emergency loans to member banks, create money to provide a resilient currency, and act as fiscal agents for the United States government. This was the plan adopted by the Federal Reserve Act.
