!!! Overview [{$pagename}] ([FED]) is the [Central Banking System] of the [United States federal government].[{$pagename}] was created on December 23, [1913|Year 1913], with the enactment of the [Federal Reserve Act], after a series of financial panics (particularly the panic of [1907|Year 1907]) led to the desire for central control of the monetary system in order to alleviate financial crises. Over the years, events such as the Great Depression in the [1930s] and the Great Recession during the [2000s] have led to the expansion of the roles and responsibilities of the [{$pagename}] System. Although an instrument of the [United States federal government], the [{$pagename}] System considers itself "an independent [Central Banking System] because its monetary [policy] decisions do __NOT__ have to be approved by the President or anyone else in the executive or legislative branches of government, [{$pagename}] does not receive funding appropriated by the [United States Congress], and the terms of the members of the Board of Governors span multiple presidential and congressional terms." The [United States federal government] sets the salaries of the board's seven governors. There are 12 [Federal Reserve Bank], each of which is responsible for [Federal Reserve Member Banks] located in the [Federal Reserve Bank] district. The size of each district was set based upon the population distribution of the [United States] when the Federal Reserve Act was passed. The charter and organization of each [Federal Reserve Bank] is established by law and cannot be altered by the member banks. [Federal Reserve Member Banks], do however, elect six of the nine members of the [Federal Reserve Board of Governors]. [{$pagename}] System has both public and private components. The structure is considered unique among [Central Banking Systems]. [{$pagename}] is also unusual in that the [United States Department of the Treasury] is entity outside of the [Central Banking System], prints the [currency] used. The [United States federal government] receives all the system's annual profits, after a statutory dividend of 6% on [Federal Reserve Member Banks]' capital investment is paid, and an account surplus is maintained. In [2015|Year 2015], the [{$pagename}] made a profit of $100.2 billion and transferred $97.7 billion to the [United States Department of the Treasury]. !! [{$pagename}] Layers [{$pagename}] is composed of several layers. ! [Federal Reserve Board of Governors] ([FRB]) [{$pagename}] is governed by the presidentially appointed [Federal Reserve Board of Governors] ([FRB]). ! [Federal Reserve Banks] Twelve regional [Federal Reserve Banks], located in cities throughout the nation, oversee the privately owned [Federal Reserve Member Banks]. [Nationally chartered commercial banks|National Bank] are required to hold stock in the [Federal Reserve Bank] of their region, which entitles them to elect some of the members for the [Federal Reserve Board of Governors]. ! [Federal Open Market Committee] ([FOMC]) [Federal Open Market Committee] ([FOMC]) sets monetary [policy]; it consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time: the president of the New York Fed and four others who rotate through one-year terms. There are also various advisory councils. ! [Federal Advisory Council] [Federal Advisory Council], composed of twelve representatives of the banking industry, advises the board on all matters within its [jurisdiction]. ! [Federal Reserve Member Banks] A [Federal Reserve Member Bank] is a private institution and owns stock in its regional [Federal Reserve Bank]. !! [United States National Payment System] [{$pagename}] plays an important role in the [United States National Payment System]. The twelve [Federal Reserve Banks] provide banking services to depository institutions and to the [United States federal government]. For depository institutions, they maintain accounts and provide various payment services, including collecting checks, electronically transferring funds, and distributing and receiving currency and coin. For the [United States federal government], the [Federal Reserve Banks] act as fiscal agents, paying [United States Department of the Treasury] checks; processing electronic payments; and issuing, transferring, and redeeming [United States federal government] securities.In the [Depository Institutions Deregulation and Monetary Control Act of 1980], Congress reaffirmed that the [Federal Reserve] should promote an efficient [United States National Payment System]. The act subjects all depository institutions, not just [Federal Reserve Member Banks], to reserve requirements and grants them equal access to [United States National Payment System]. The [Federal Reserve] plays a role in the nation's retail and wholesale payments systems by providing financial services to depository institutions. Retail payments are generally for relatively small-dollar amounts and often involve a depository institution's retail clients—individuals and smaller businesses. The [Federal Reserve Banks]' retail services include distributing [currency] and coin, collecting checks, and electronically transferring funds through the automated clearinghouse system. By contrast, wholesale payments are generally for large-dollar amounts and often involve a depository institution's large corporate customers or counterparties, including other financial institutions. The Reserve Banks' wholesale services include electronically transferring funds through the [Federal Reserve Wire Network] ([Fedwire]) !! More Information There might be more information for this subject on one of the following: [{ReferringPagesPlugin before='*' after='\n' }] ---- * [#1] - [Federal_Reserve_System|Wikipedia:Federal_Reserve_System|target='_blank'] - based on information obtained 2017-12-20-