One of the main functions of the Federal Reserve is to serve as what type of bank?

The Federal Reserve, often referred to as the Fed, serves as the central bank of the United States. A central bank is responsible for overseeing the monetary system for a nation or group of nations. Its primary functions include managing the nation's money supply, regulating banks, providing financial services, implementing monetary policy, and serving as a lender of last resort to ensure financial system stability.

Unlike commercial banks, which focus on providing services to individuals and businesses (such as checking accounts, loans, and mortgages), or investment banks, which specialize in capital markets and advisory services, the Federal Reserve's role is fundamentally different and broader in scope. It doesn't deal directly with consumers but has a critical role in managing the economy through interest rates and monetary policy.

Furthermore, savings banks mainly focus on accepting deposits and making loans to consumers, similar to commercial banks but with a specific focus on savings products. In contrast, the Federal Reserve's objectives drive economic stability and growth at a national level, further emphasizing its role as a central bank. This includes action during financial crises, where the Fed's interventions can help stabilize markets and provide liquidity to the banking system.