Which act allowed the Federal Reserve to establish 12 regional banks?

The Federal Reserve Act, passed in 1913, was crucial in creating the Federal Reserve System, which included the establishment of 12 regional Federal Reserve Banks. This act was designed to provide the nation with a safer and more flexible monetary and financial system, responding to the banking panics of the early 20th century. By dividing the country into 12 districts, each with its own Federal Reserve Bank, the act aimed to ensure that the banking system would be more accessible and better managed on a regional level while still being part of a central regulatory framework.

The act also emphasized the importance of coordinating monetary policy, supervising and regulating banks, and providing financial services. The establishment of these regional banks allowed the Federal Reserve to maintain local oversight while facilitating national financial stability. Therefore, the Federal Reserve Act is the correct answer as it lays the foundation for the structure of the Federal Reserve System as it exists today.