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“Some Federal Reserve policymakers also privately see comparisons between the current distress in credit markets and the bank runs of the 19th century, in which savers lost confidence in banks and demanded their money back, creating a spiralling liquidity crisis for institutions that had invested this money in longer-term assets.

That scenario ultimately led to the creation of the US Federal Reserve and other central banks as lenders of last resort for the banking system.”
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Another a-whole writer making stuff up instead of looking it up.

The Federal Reserve was created on December 23, 1913

Then came Oct 29, 1929. Margin calls. Savings withdrawn.

Bernake, November 21, 2002:

Although deflation and the zero bound on nominal interest rates create a significant problem for those seeking to borrow, they impose an even greater burden on households and firms that had accumulated substantial debt before the onset of the deflation. This burden arises because, even if debtors are able to refinance their existing obligations at low nominal interest rates, with prices falling they must still repay the principal in dollars of increasing (perhaps rapidly increasing) real value. When William Jennings Bryan made his famous "cross of gold" speech in his 1896 presidential campaign, he was speaking on behalf of heavily mortgaged farmers whose debt burdens were growing ever larger in real terms, the result of a sustained deflation that followed America's post-Civil-War return to the gold standard. The financial distress of debtors can, in turn, increase the fragility of the nation's financial system--for example, by leading to a rapid increase in the share of bank loans that are delinquent or in default. Japan in recent years has certainly faced the problem of "debt-deflation"--the deflation-induced, ever-increasing real value of debts. Closer to home, massive financial problems, including defaults, bankruptcies, and bank failures, were endemic in America's worst encounter with deflation, in the years 1930-33--a period in which (as I mentioned) the U.S. price level fell about 10 percent per year.

That is to say, the Federal Reserve is yet another legacy of America's fondness for demagogues with fancy-talk solutions to whatever current crisis is extant. The demagogue in this case -- as in many of that turn of the century era was William Jennings Bryant -- the bane of Grover Cleveland. In the case of the Federal Reserve Bryan, America's King of Speeches, was played the fool by the big moneymen, and Woodrow Wilson's cohort.

America caught what its predilection, its fondness for demagogues with Big Ideas for Our Times Now, allowed it to get. Have we developed an immunity yet? Or is this a constant, intrinsic to America's being, weakness? Or is it a weakness at all? It is some blessing instead?