The Federal Reserve is the Central Bank of the United States, it was founded December 13, 1913, Chair and President is Janet Yellen. The mission statement of the Federal Reserve is to provide the nation with a safe, flexible, and stable monetary and financial system.
The board consists of the seven governors, appointed by the president and confirmed by the Senate. Governors serve 14-year, staggered terms to ensure stability and continuity over time. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term limitations.
The Board of Governors are to guide monetary policy action, to analyze domestic and international economic and financial conditions, and to lead committees that study current issues, such as consumer banking laws and electronic commerce. A network of 12 Federal Reserve Banks and 24 branches make up the Federal Reserve System.
The Reserve Banks serve banks, the U.S. Treasury, and, indirectly, the public. A Reserve Bank is often called a “banker’s bank,” storing currency and coin, and processing checks and electronic payments. The Reserve Banks handle the Treasury’s payments, sell government securities and assist with the Treasury’s cash management and investment activities. Reserve Banks conduct research on regional, national and international economic issues.
The chairman report twice a year to Congress on the Fed’s monetary policy objectives, testifies on numerous other issues, and meets periodically with the Secretary of the Treasury. All member banks hold stock in Reserve Banks and receive dividends. Unlike stockholders in a public company, banks cannot sell or trade their Fed stock.
Approximately 38 percent of the 8,039 commercial banks in the United States are members of the Federal Reserve System. National banks must be members; state-chartered banks may join if they meet certain requirements.
In addition to the approximately 3,000 member banks, about 17,000 other depository institutions provide the American people checkable deposits and other banking services. These depository institutions include nonmember commercial banks, savings banks, savings and loan associations, and credit unions.
The Federal Open Market Committee, or FOMC, is the Fed’s monetary policymaking body. It is responsible for formulation of a policy designed to promote stable prices and economic growth. Simply put, the FOMC manages the nation’s money supply.
The FOMC typically meets eight times a year in Washington, D.C. At each meeting, the committee discusses the outlook for the U.S. economy.
Author,
Gigi King 6/29/2016
Works Cited
http://www.federalreserveonline.org
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