Fed Structure

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by JennaMarie37
Last updated 7 years ago

Social Studies

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Fed Structure

At the top of the Fed is the Chair, currently Ben Bernake. He and the Vice Chair are chosen by the president from the Board of Governers, then confirmed by the Senate to serve an unlimeted number of 4-year terms. It is the chair's responsibility to advise and watch over the Board of Governers and to be the spokesperson of the Federal Reserve. He also has the final say in setting the discount rate and Fed funds rate, and makes many speeches publicly and before Congress to influence financial decisions.

Federal Reserve

Structure of the Fed

District Reserve Banks, along with their reigonal branches are scattered around the country, each providing services to a portion of the United States (as shown in the map above). These banks enforce monetary policy determined by the Board of Governers, supervise the member banks in their district, give out loans, and reccomend interest rates. Each District Bank is run by a Board of Direcors; six non-bankers chosen by member banks and three bankers chosen by the Board of Governers, all under a president who is selected by the Board with approval from the Board of Governers.

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The Board of Governers is the group that makes the decisions considering monetary policy. Like the Chair, each member is chosen by the president and confirmed by the Senate, but for a 14 year term. These seven governers supervise the work of the District Reserve Banks and depositary institutions, as well as having a majority vote power in the FOMC, making them very influential to the making of monetary policy.

Member banks are all national banks in the Federal Reserve System, along with some state-chartered banks that meet the requirements. Around one third of all commercial banks are member banks. These banks buy and keep stocks from District Banks. They also perform regular bank functions such as lending, transferring, exchanging, and safeguarding money.


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