1. The Federal Reserve The Banker’s Bank

2. Purpose of the Fed  Central bank – a type of bankers’ bank.  A central bank conducts monetary policy and acts as financial adviser to the government.  It is the bank’s ability to create money that gives the central bank the power to control the money supply.

3. Structure of the Fed  The Fed is a semiautonomous organization composed of 12 regional banks.  It is run by a Board of Governors appointed by the President with the advice and consent of the Senate.  The President appoints one of the seven members of the Board of Governors to be chairman for a four-year term.

4. Independence of the Fed  The Fed has much more independence than most government agencies.  The Fed does not rely on Congress for appropriations.  Its governors serve 14 year terms and cannot be reappointed.

5. Federal Reserve Districts San Francisco Kansas City Minneapolis Chicago. Boston Richmond Atlanta St. Louis *Alaska and Hawaii are under the jurisdiction of the Federal Reserve Bank of San Francisco Dallas New York PhiladelphiaCleveland Washington DC

6. Federal Reserve Structure Chief policymaking body of the Federal Reserve System Open market operations Provides services Financial institutions Federal government Board of Governors of the Federal Reserve System 1 Chairman 1 Vice-Chairman 5 Directors Regional Reserve Banks and Branches 12 regional Federal Reserve banks 25 branches of Federal Reserve banks Oversees Federal Open Market Committee 7 members of the Board of Governors 5 Federal Reserve bank presidents

7. Duties of the Fed  Monetary policy – influencing the supply of money and credit in the economy.  The Fed issues coin and currency.  It provides banking services to the U.S. government.

8. Duties of the Fed  The Fed supervises and regulates financial institutions.  It serves as a lender of last resort to financial institutions.  It provides services such as check clearing to financial institutions