Federal Reserve Bank

12 Pages 3123 Words

roved by the President or the executive branch, the System must report to Congress, which created it. Congress has the power to alter or even abolish the System at any time.
The unique structure of the Federal Reserve System also provides internal checks
And balances ensuring that its decisions and operations are not dominated by any one
System component. The boxes that follow outline these components and their functions.
The Board of Governors
Is located in Washington, DC
Consists of seven members appointed by the President and confirmed by the Senate for staggered14-year terms; the chairman and vice chairman are designated by the President, with Senate approval, for four-year terms (renewable during their Board-member terms). Reports to Congress, including an annual report on operations and semi-annual reports on the state of the economy and the System's objectives for the growth of money and credit. The chairman meets regularly with the President and the Secretary of the Treasury; members testify frequently before congressional committees. Sets reserve requirements for depository institutions and approves discount rate changes proposed by Reserve Bank directors. Establishes and administers financial safety and soundness and consumer protective regulations; administers regulations regarding bank consolidation. Oversees Reserve Banks' services to depository institutions, bank supervision functions, and accounting procedures; approves Reserve Banks' budgets.

Federal Reserve Banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco; branches are located in 25 other cities.
Are each separately incorporated, with a board of nine directors. Directors, under Board of Governors supervision, oversee their Bank's operations and appoint and recommend salaries of the Bank's presi...