The Federal Reserve and Monetary PolicyChapter 16 The Federal Reserve SystemChapter 16, Section 1 Federal Reserve Act of 1913Created the Federal Reserve (FED)
System of federal banks
Overseen by the Board of Governors
14 year terms appointed by the President
Appoints a chair confirmed by the Senate
Chairs serve a four year term that can be renewed
FED Districts12 districts
District bank reports on economic activity in the district to the central bank
Member banks... All nationally chartered banks are required to join the Fed. Member banks contribute funds to join the system, and receive stock in and dividends from the system in return. This ownership of the system by banks, not government, gives the Fed a high degree of political independence.
The FOMC (Federal Open Market Committee), which consists of The Board of Governors and 5 of the 12 district bank presidents, makes key decisions about interest rates and the growth of the United States money supply. Federal Reserve FunctionsChapter 16, Section 2 Functions of the FEDBanking and fiscal services to the government
Banking and fiscal services to member and nonmember banks
Regulates the banking industry
Tracks and manages the money supply ...