Understanding the Federal Reserve: A Comprehensive Guide
The Federal Reserve, often referred to as the Fed, is the central banking system of the United States. Established in 1913, its primary purpose is to provide the nation with a safe, flexible, and stable monetary and financial system. But how does the Federal Reserve work? Let's delve into its structure, functions, and the key roles it plays in the economy. The Structure of the Federal Reserve The Federal Reserve is composed of three key entities: 1. Board of Governors: Located in Washington, D.C., the Board of Governors consists of seven members appointed by the President and confirmed by the Senate. They serve staggered 14-year terms, ensuring continuity and independence. The Board oversees the entire Federal Reserve System and helps shape monetary policy. 2. Federal Reserve Banks: There are 12 regional Federal Reserve Banks, each serving a specific geographic area of the U.S. These banks ...