Federal Reserve Board (2024)

FAQs

What is the Federal Reserve Board do? ›

The Federal Reserve Board (FRB) is the governing body of the Federal Reserve System, America's central bank. The FRB is an independent governmental agency in charge of conducting monetary policy through open market operations or setting interest rates.

The Board of Governors--located in Washington, D.C.--is the governing body of the Federal Reserve System. It is run by seven members, or "governors," who are nominated by the President of the United States and confirmed in their positions by the U.S. Senate.

Federal Reserve Board Salary FAQs

How much does Federal Reserve Board pay? The average Federal Reserve Board salary ranges from approximately $54,740 per year (estimate) for a Train Operator to $234,528 per year (estimate) for a Director.

Federal Reserve Banks' stock is owned by banks, never by individuals. Federal law requires national banks to be members of the Federal Reserve System and to own a specified amount of the stock of the Reserve Bank in the Federal Reserve district where they are located.

The agency is governed by a board whose members are selected by the President and approved by Congress. However, the Fed is also independent in the sense that it conducts monetary policy and related decision-making autonomously.

The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements.

Structure and Function

The 12 Federal Reserve Banks and their 24 Branches are the operating arms of the Federal Reserve System. Each Reserve Bank operates within its own particular geographic area, or district, of the United States.

So is the Fed private or public? The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends.

Where are the 12 Federal Reserve Banks located? ›

The Reserve Banks are decentralized by design and are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

General. The Federal Reserve is subject to oversight by Congress.

The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.

Critics have questioned its effectiveness in managing inflation, regulating the banking system, and stabilizing the economy. Notable critics include Nobel laureate economist Milton Friedman and his fellow monetarist Anna Schwartz, who argued that the Fed's policies exacerbated the Great Depression.

The Federal Reserve System is composed of several layers. It is governed by the presidentially-appointed board of governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, regulate and oversee privately-owned commercial banks.

Appointments to the Board of Governors are staggered—one Governor's term expires every two years. Terms are staggered to provide the Fed political independence as a central bank, ensuring that one president cannot take advantage of his power to appoint Governors by "stacking the deck" with those who favor his policies.

In November 1910, six men – Nelson Aldrich, A. Piatt Andrew, Henry Davison, Arthur Shelton, Frank Vanderlip and Paul Warburg – met at the Jekyll Island Club, off the coast of Georgia, to write a plan to reform the nation's banking system.

Outline. Composed of the seven members of the Board of Governors and five Reserve Bank presidents, one of whom is the president of the Federal Reserve Bank of New York, the other presidents serve as voting members for one-year terms on a rotating basis.