Street and Constitution Ave. NW
Washington, DC 20551
Chair: Janet Yellen
The Federal Reserve System is the central
bank of the United States. It was founded by Congress in 1913
to provide the nation with a safer, more flexible, and more stable
monetary and financial system. Over the years, its role in banking
and the economy has greatly expanded.
The Federal Reserve is made up of 12 regional
banks known as districts:
2nd District--New York
8th District--St. Louis
10th District--Kansas City
12th District--San Francisco
The Board of Governors, located in Washington, D.C., consists of seven members appointed by the President of the United States and supported by a 2,540-person staff. Besides conducting research, analysis, and policymaking related to domestic and international financial and economic matters, the Board plays a major role in the supervision and regulation of U.S. financial institutions and activities, has broad oversight responsibility for the nation's payments system and the operations and activities of the Federal Reserve Banks, and plays an important role in promoting consumer protection, fair lending, and community development.
The Reserve is an independent entity of
the government and the regional banks are operated like private
corporations with shares of stock issued to member banks.
The Federal Reserve's duties fall into
four general areas:
1. Conducting the nation's monetary policy
by influencing the monetary and credit conditions in the economy
in pursuit of maximum employment, stable prices, and moderate
long-term interest rates
2. Supervising and regulating banking institutions to ensure
the safety and soundness of the nation's banking and financial
system and to protect the credit rights of consumers
3. Maintaining the stability of the financial system and containing
systemic risk that may arise in financial markets
4. Providing financial services to depository institutions, the
U.S. government, and foreign official institutions, including
playing a major role in operating the nation's payments system
Janet Yellen was sworn in as the new Chair on February 3, 2014 replacing Ben Bernanke. She is the first woman to lead the Federal Reserve and will serve a four-year term.
The Federal Reserve's income is derived
primarily from the interest on U.S. government securities that
it has acquired through open market operations. Other sources
of income are the interest on foreign currency investments held
by the System; fees received for services provided to depository
institutions, such as check clearing, funds transfers, and automated
clearinghouse operations; and interest on loans to depository
institutions (the rate on which is the so-called discount rate).
After paying its expenses, the Federal Reserve turns the rest
of its earnings over to the U.S. Treasury.
According to the 2012 Annual Report, there were 17,724 employees at the 12 member banks. New York had the largest employment with 3,124 workers followed by Atlanta at 1,563. Total annual salaries at the 12 banks were $1.64 billion in 2012.
Employees of the Federal Reserve Banks
are not government employees. They are paid as part of the expenses
of their employing Reserve Bank. Employees at banks can receive
annual bonuses based on the bank's performance.
Updated February 9, 2014