Which U.S. law created the Federal Reserve after the Panic of 1907 exposed weaknesses in the banking system?

The Federal Reserve Act created the Federal Reserve after the Panic of 1907 exposed weaknesses in the U.S. banking system.

The law was signed by President Woodrow Wilson on December 23, 1913. It established the Federal Reserve System, including a network of regional Reserve Banks and a central governing board. The structure was intended to provide a more elastic currency, improve banking stability, and supply emergency liquidity.

The Panic of 1907 began after a failed attempt to corner shares of United Copper Company. Runs spread to trust companies, and the crisis worsened when the Knickerbocker Trust Company failed. Financier J. P. Morgan organized private support to stabilize the system, highlighting the absence of a formal U.S. central bank.

The Federal Reserve Act was not a direct market-recovery measure for the 1907 episode because it came six years later. Its creation was a major institutional response to the lessons policymakers drew from that financial panic.