Judging A Giant: Greenspan's Legacy -- Need To Know
The Federal Reserve System isn't as old as some would think, nor was it a wildly popular concept when the idea was first floated. There was significant distrust about the potential powers of a central bank even though a series of financial panics had beset the country in the prior century.
The Fed was created by Congress with the Federal Reserve Act of 1913 to provide the nation
with "a safer, more flexible and more stable monetary and financial system," as the Fed website home page puts it.
For more information, the Fed website is a good place to start, even if it is a bit uninviting.
Fed chairmen have been few and far between for the most part. Alan Greenspan was the 13th Fed boss. His top salary was $186,600.
Board members serve 14-year terms, chairmen four-year ones. A governor who has served a full term may not be reappointed, but one who was appointed to complete an unexpired term may be reappointed to a full fourteen-year term. Such was the case with Greenspan, who served more than 18 years.
During that period, Greenspan faced many challenges and crises, but early on in his tenure came one of his defining moments -- the stock market crash of October 19, 1987, when the Dow Jones Industrial Average lost almost a quarter of its value. Twenty years on, here is one analysis.
At the time, one of several so-called causes of the crash was the Fed's interest rate hike in Septemeber, the first under Chairman Greenspan. Here are notes of the FOMC's Sept. 22 meeting and what members were thinking at the time.