Economic uncertainty has caused exaggerated criticism of the Federal Reserve. Money and Banking deepened my understanding of the Federal Reserve and helped me challenge these criticisms. The standard of living in the United States would collapse if people lost confidence in the safety of financial institutions. Frederic Mishkin points out in The Economics of Money Banking, and Financial Markets (2010) that “banks and other financial institutions are what make financial markets work. Without them, financial markets would not be able to move funds from those who save to those who have productive investment opportunities." (page 7). When people lose faith in the economy, this activity stalls or weakens, as a result, asset prices fall, unemployment rises and companies default, as was the case with Lehman Brothers in 2008. Money and the system banking taught me that the Federal Reserve is the greatest safeguard for our economic system. banking system and therefore the greatest protector of our wealth. The three most important things I learned in Money and Banking are:1. The Federal Reserve protects our economy and wealth through its role as “lender of last resort.”2. The Federal Reserve is unique in both its independence and its objectives. This allows him to pursue unprejudiced policies that safeguard the economy and promote growth.3. Economic markets are becoming increasingly interconnected, increasing global systemic risk. Discussion 1: The Fed protects our economy and our wealth through its role as “lender of last resort.” important role was to be that of "lender of last resort"; To prevent bank failures from spiraling out of control, the ...... middle of paper ...... divestitures in 1980 and 1981-1982." Despite criticism at the time, history proved that Volcker was right In 1983 inflation did not increase, although the rate of money growth increased dramatically. Eventually, Volcker's anti-inflation strategy caused unemployment and inflation to fall. reflect on the successes and failures of today's policies that history will demonstrate that, despite current criticism, the Fed has done more good than harm and is the greatest safeguard for our banking system and therefore, the greatest protector of our wealth citeMishkin, Frederic S. (2010). , Banking and Financial Markets. Pearson Education: New York (pp. 7, 189, 314, 321, 384-385, 386, 423,639) Brigham, E. and Houston, J. (2009). )..