Structure of the Federal Reserve System
From Wikipedia, the free encyclopedia
The Structure of the Federal Reserve System is unique among central banks in the world, with both public and private aspects.[1] It is described as "independent within the government" rather than "independent of government".[2]
The Federal Reserve is composed of five parts:[3][4]
- The presidentially appointed Board of Governors (or Federal Reserve Board), an independent federal government agency located in Washington, D.C.
- The Federal Open Market Committee (FOMC), composed of the seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank presidents, which oversees open market operations, the principal tool of U.S. monetary policy.
- Twelve regional Federal Reserve Banks located in major cities throughout the nation, which divide the nation into twelve Federal Reserve districts. The Federal Reserve Banks act as fiscal agents for the U.S. Treasury, and each has its own nine-member board of directors.
- Numerous other private U.S. member banks, which own required amounts of non-transferable stock in their regional Federal Reserve Banks.
- Various advisory councils.[5]
The Federal Reserve does not require public funding, instead it remits its profits to the U.S. Federal government. It derives its authority and purpose from the Federal Reserve Act, which was passed by Congress in 1913 and is subject to Congressional modification or repeal.[6]