Federal Reserve Act Law and Legal Definition

The Federal Reserve Act is a U.S federal statute. This Act is commonly known as the Owen-Glass Act. The Act is the result of the financial disaster of 1907. This Act carries an object of preventing financial panics by providing cash from a money reserve. Thus, the Act created a Federal Reserve System as the central banking system in the U.S. This Act grants legal authority to the Federal Reserve System to issue legal tender.