The Federal Reserve was established in 1913 when Congress passed the Federal Reserve Act, also known as the Glass-Owen Bill. It would serve as the central bank of the United States of America. This was created in response to the initial financial crisis that took place in 1907 where there was widespread panic and bank runs. In this capacity, the Federal Reserve, or the Fed for short, has the power to oversee the monetary policies of all banks in the United States such as influencing monetary and credit conditions to ensure stability in prices and moderate interest rates that would last in the long run to protect the credit rights of consumers, contain the systemic risks in the financial markets and providing financial services to the US government as well as foreign governments that do business with the US. The means to do this is the creation and use of an elastic currency, as well as means rediscounting commercial paper in order to keep the economy stable (Federal Reserve Bank of New York).
Given these responsibilities in overseeing the finances of the nations and its global neighbors, the Fed was mandated to be independent to keep it from being controlled by a select group with vested interests since part of its mandate is to protect every citizen with a bank account from unfair or reckless business practices and trading in the financial markets. As a matter of fact, no public official is allowed to sit in the Board of the Fed. In addition, it does not make a profit. Furthermore, its organization has a system of checks and balances to ensure no single element will dominate the others.