Federal Reserve Board (FRB)
Candlefocus EditorThe Federal Reserve Board (FRB), also known as the Federal Reserve System, is the governing body of America's central bank. Established in 1913 by the Federal Reserve Act, the FRB is an independent governmental agency that is responsible for conducting monetary policy in the US. This is done primarily through open market operations and setting interest rates, allowing the nation to manage its currency, control inflation, and adjust unemployment levels.
The FRB is composed of seven members: a chair and six board members. These members are appointed by the President of the United States and confirmed by the Senate for four-year terms. To ensure continuity in their functions and activities, members are only allowed to serve a maximum of two terms. As such, the FRB changes its composition somewhat regularly when appointments come up for renewal.
The chair of the FRB is the most powerful of the seven members and is responsible for the executive powers of the Federal Reserve System. This includes the power to formulate and implement monetary policy, regulate the banking system, and appoint members of the other six-member board. Additionally, the Chair presides over public hearings, appoints and oversees the activities of the 12 regional Reserve Banks, ensures that these institutions comply with federal banking regulations, and communicates the Fed's public policies.
The other six board members are responsible for a variety of tasks and duties, such as providing direction to the Federal Open Market Committee and the Board's staff, enacting proclamations, and participating in legislative initiatives that affect the operations of the FRB. In order to ensure the effective implementation of their duties, the six members meet regularly to discuss economic trends and make policy decisions.
The FRB is consistently evaluated by congressional members to ensure its processes and policies are beneficial to the nation's economic goals. Its actions are very influential in the currency, banking, and financial sectors of the US economy, which is why the FRB is so important to the American people.
The FRB, with its seven members and their collective responsibilities, makes key decisions regarding America's economic and financial policies. While, relatively independent in its operations, the FRB is still accountable to Congress and the American people, making it a vital part of America's economic success.