The Fed’s most important function is controlling the
nation’s money supply. The Fed also performs several other
functions: It clears interbank payments, is responsible for
many of the regulations governing banking practices and
standards, and acts as a lender of last resort for troubled
banks that cannot find any other sources of funds. The Fed
also acts as the bank for the U.S. government. Beginning in
2008 the Fed greatly expanded its lending activities to the
private sector.