Robert Shiller traces central banking from its origins in the goldsmith bankers of the United Kingdom through the founding of the Bank of England in 1694, then follows the American path from the Suffolk System through the National Banking era to the creation of the Federal Reserve in 1913. He compares approaches in the European Union and Japan before turning to the tools of modern U.S. monetary policy: the federal funds rate set by the Federal Open Market Committee and the 2008 Emergency Economic Stabilization Act provision allowing interest on reserve balances. Shiller distinguishes reserve requirements, which restrict liabilities, from capital requirements, which restrict assets, and works through a simple numerical example to show why banks struggled during the 2007-2008 crisis. The lecture closes with his thoughts on regulatory reform, including Basel III, aimed at preventing future banking crises. Part of his Yale Financial Markets course.