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Reserve Banks also supervise commercial banks in their regions. A Reserve Bank is often called a "banker's bank," storing currency and coin, and processing checks and electronic payments. Louis, Minneapolis, Kansas City, Dallas and San Francisco. The Banks are named after the locations of their headquarters - Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Reserve Banks are the operating arms of the central bank.Įach of the 12 Reserve Banks serves its region of the country, and all but three have other offices within their Districts to help provide services to depository institutions and the public. Federal Reserve BanksĪ network of 12 Federal Reserve Banks and 24 branches make up the Federal Reserve System under the general oversight of the Board of Governors.
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Its financial accounts are audited annually by a public accounting firm, and these accounts are also subject to audit by the General Accounting Office. The Board funds its operations by assessing the Federal Reserve Banks rather than through Congressional appropriation. The chairman reports twice a year to Congress on the Fed's monetary policy objectives, testifies on numerous other issues, and meets periodically with the Secretary of the Treasury. The Board's most important responsibility is participating in the Federal Open Market Committee (FOMC), which conducts our nation's monetary policy the seven governors comprise the voting majority of the FOMC with the other five votes coming from Reserve Bank presidents.īoard members are called to testify before Congress, and they maintain regular contact with other government organizations as well. The Board sets reserve requirements for depository institutions and approves changes in discount rates recommended by Reserve Banks. The Board oversees the activities of Reserve Banks, approving the appointments of their presidents and some members of their boards of directors. The Board also exercises broad supervisory control over the financial services industry, administers certain consumer protection regulations, and oversees the nation's payments system. The chairman and vice-chairman are appointed to four-year terms and may be reappointed subject to term limitations.Īmong the responsibilities of the Board of Governors are to guide monetary policy action, to analyze domestic and international economic and financial conditions, and to lead committees that study current issues, such as consumer banking laws and electronic commerce. Governors serve 14-year, staggered terms to ensure stability and continuity over time. The board consists of the seven governors, appointed by the president and confirmed by the Senate. The Board of Governors, also known as the Federal Reserve Board, is the national component of the Federal Reserve System. The Board of Governors, located in Washington, D.C., provides the leadership for the System. The Federal Reserve has three primary functions: Monetary Policy, Banking Supervision, Financial Services Board of Governors Test your knowledge about the Federal Reserve through these quizzes. Over the years, its role in banking and the economy has expanded. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserve System is the central bank of the United States. The Structure and Functions of the Federal Reserve System