What is the main purpose of the Federal Reserve System?

The main purpose of the Federal Reserve System is to regulate the U.S. monetary and financial system. Established in 1913, the Federal Reserve acts as the central bank of the United States and is tasked with overseeing and implementing monetary policy. This involves controlling inflation, managing employment levels, and stabilizing the financial system to contribute to a healthy economy. Through mechanisms like setting interest rates and regulating the money supply, the Federal Reserve aims to provide stability and confidence in the economy, which is essential for fostering economic growth.

While the other roles mentioned, such as serving as a clearinghouse for banks, managing national debt, and providing insurance for bank deposits, are important functions associated with the banking system, they do not capture the overarching responsibility of the Federal Reserve. The regulation of the monetary and financial system is foundational to its existence and its influence on the economy's direction.