Structure of the Federal Reserve System

The Federal Reserve is the main banking body of the United States. All the regional banks and smaller banks come under the influence of this system. This creates a network between the economic sector of the country which makes making policies for the general public much easier. This acts as a good means to get the opinions of the public and the banking sector, and new policies consisting of both of their interests can be issued. This is the heart and soul of the American economic sector. 

Board of Governors

The federal reserve system is headed by seven members who are called the Board of the Governors. The main purpose of this board is to oversee all the district banks that are affiliated with the federal reserve bank and maintain the monetary policies in all these banks. The term of these governors is 14 years long. This Board of Governors are elected by the Prime Minister of the United States and is reinforced by the Senate council. This board gives a brief and accurate representation of the financial, economic, commercial, geographic and agricultural divisions of the country. 

The Chairman and the Vice-Chairman of this board are elected out of the seven members that are chosen by the Prime Minister of the States. Furthermore, the Board of Governors does not receive any kind of funding from the government of the states. As these governors’ terms are nearly three American Prime Ministers’ terms, they have to work accordingly throughout their span. They have to submit their annual report to the Speaker of the U.S. House of Representatives. This entity has control over the entire banking sector of the States. It also controls the regulations that are put forward by the Federal Reserve System. 

Federal Reserve Banks

The Federal Reserve System has 12 regional Federal Reserve Banks working under it. It also has 25 branches which act in subordination to this system. Each of these banks is overseen by the Board of Governors of the Federal Reserve System themselves. Each bank has its board of directors and they work by the President of the Federal System. This in itself boosts up the information and management facilities for both. This work reinforces the decision making body for the System and helps them keep a check on the monetary policies. 

The board of directors of the reserve banks take into account the interests of the general public and the entirety of the banking community. And, also observe the way their respective banks are functioning as per the interests of the related population. The President of the board of directors is appointed by the Board of Governors of the Federal Reserve System. These reserve banks have 9 board members. Three of these represent the interests of the bankers while the other 6 represent the public interests in front of the related board. These banks have full control over the information that is in their regional economy. 

Federal Open Market Committee

The Federal Open Market Committee comprised all the seven members of the Board of Governors and the five representatives from the federal banks of the States. All these people are put together to regulate the marketplace of the country. This committee puts forward a major check on all the monetary policies that are within effect. This committee influences the overall economy of the States taking into account the money that the States has for into its reserves. 

This committee also fulfils its duties in the exchange market. All the members of this committee have a say in the type of policy that is being put into effect in the States. However, the right to dismiss any policies lies only in the hands of the Board of Governors. This committee determines the trades and policies that will be beneficial for the country and its general population. 

Conclusion 

The entire economy and financial policies of the United States of America centre around the Federal Reserve Bank. This bank system is acknowledged as the central bank of the United States of America. All the small banks and funding institutes in the States are associated with this in one way or another. This leads to the formation of a tightly knit network which functions in a much better way toward the interests of the public. All the financial policies in effect in the States are approved by this system.