The Organization of the Federal Reserve System
1. The Board of Governors of the Federal Reserve System
Appointments to the Board.
There are seven members in the Board of Governors. They are appointed by the President and confirmed by the Senate to serve 14-year terms of office. The President designates, and the Senate confirms, two members of the Board to be Chairman and Vice Chairman, for four-year terms.
Only one member of the Board may be selected from any one of the twelve Federal Reserve Districts. In making appointments, the President is directed by law to select a "fair representation of the financial, agricultural, industrial, and commercial ...view middle of the document...
S. activities of foreign-owned banks. The Board also sets margin requirements, which limit the use of credit for purchasing or carrying securities.
Another area of Board responsibility is the development and administration of regulations that implement major federal laws governing consumer credit such as the Truth in Lending Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act and the Truth in Savings Act
The Board usually meets several times a week.
2. The Federal Open Market Committee
The FOMC is composed of the seven members of the Board of Governors and five Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves on a continuous basis; the presidents of the other Reserve Banks serve one-year terms on a rotating basis. Rotation is such that each year one member is elected to the Committee by the boards of directors of Reserve Banks in each of the following groups: (1) Boston, Philadelphia, and Richmond; (2) Cleveland and Chicago; (3) Atlanta, St. Louis, and Dallas; and (4) Minneapolis, Kansas City, and San Francisco
Each year at its first meeting, the Committee elects its Chairman and Vice Chairman and selects staff officers to serve the Committee for the coming year. Traditionally, the Chairman of the Board of Governors is elected Chairman and the president of the Federal Reserve Bank of New York is elected Vice Chairman. Staff officers are selected from among the officers and employees of the Board of Governors and the Federal Reserve Banks.
By law, the FOMC must meet at least four times each year in Washington, D.C. Since 1981, eight regularly scheduled meetings have been held each year at intervals of five to eight weeks. If circumstances require consultation or consideration of an action between these regular meetings, members may be called on to participate in a special meeting or a telephone conference, or to vote on a proposed action by telegram or telephone. At each regularly scheduled meeting, the Committee votes on the policy to be carried out during the interval between meetings.
By law, the Board of Governors must keep a record of the actions taken by the FOMC on all questions of policy and to include in its annual the vote on and reasons for each action. To provide this information on a timely basis, minutes of regularly scheduled meetings are released to the public three weeks after the date of the FOMC meeting.
Twice a year the Board submits a written report to Congress on the state of the economy and the course of monetary policy, and the Chairman is called on to testify on this report.
3. Federal Reserve Banks
Organization of the Banks
Federal Reserve Banks operate under the general supervision of the Board of Governors in Washington. Each Bank has a nine-member Board of Directors that oversees its operations.
Federal Reserve Banks generate their own income, primarily from interest earned on...