Federal Reserve System
The Federal Reserve System is the central bank of the United States. The Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee work together to promote the health of the U.S. economy and the stability of the U.S. financial system.
Board of Governors of the Federal Reserve System
The seven members of the Board of Governors of the Federal Reserve System are nominated by the President and confirmed by the Senate. A full term is fourteen years. One term begins every two years, on February 1 of even-numbered years. A member who serves a full term may not be reappointed. A member who completes an unexpired portion of a term may be reappointed. All terms end on their statutory date regardless of the date on which the member is sworn into office.
The Chairman and the Vice Chairman of the Board are named by the President from among the members and are confirmed by the Senate. They serve a term of four years. A member's term on the Board is not affected by his or her status as Chairman or Vice Chairman.
Federal Reserve Banks
The Federal Reserve System is made up of twelve districts or service areas.
Each of the 12 Federal Reserve Banks is separately incorporated, and each has its own president and board of directors. Presidents are appointed to five-year terms by the bank’s board of directors. Each branch office also has its own board of directors.
The directors serve three-year terms and represent the various sectors of the economy, including business and industry, agriculture, finance, labor, and consumers.
Although the Reserve Banks were created by legislative act, they receive no budget appropriations from Congress. Each of them is self-sufficient, earning income from interest on financial holdings, from interest on loans to depository financial institutions, and from fees for the services provided to those institutions.
At the end of each year, Reserve Banks return to the U.S. Treasury all earnings in excess of operating expenses.
For a map of Federal Reserve Banks locations, visit https://www.federalreserve.gov/aboutthefed/federal-reserve-system.htm
Federal Open Market Committee (FOMC)
The Federal Open Market Committee (FOMC) is the System’s main body for carrying out an important role in the U.S. economy: the formulation and conduct of monetary policy.
The FOMC consists of 12 voting members--the seven members of the Board of Governors; the president of the Federal Reserve Bank of New York; and 4 of the remaining 11 Reserve Bank presidents, who serve one-year terms on a rotating basis.
All 12 of the Reserve Bank presidents attend FOMC meetings and participate in FOMC discussions, but only the presidents who are Committee members at the time may vote on policy decisions.
By law, the FOMC determines its own internal organization and, by tradition, the FOMC elects the Chair of the Board of Governors as its chair and the president of the Federal Reserve Bank of New York as vice chair. FOMC meetings typically are held eight times each year in Washington, D.C., and at other times as needed.