Who We Are
Congress created the Federal Reserve System (“Federal Reserve”) in 1913 to serve as the central bank of the United States and to provide the nation with a safer, more flexible and more stable monetary and financial system. Over the years, the Federal Reserve's role in banking and the economy has expanded, but its focus has remained the same.
The Federal Reserve is a decentralized central bank, with Reserve Banks and Branches in 12 Districts across the country, coordinated by a Board of Governors in Washington, D.C. The Board of Governors, appointed by the President of the United States and confirmed by the Senate, represents the public sector, or governmental side of the Federal Reserve. The Reserve Banks and the local citizens on their boards of directors represent the private sector.
Today, the Federal Reserve’s three functions are:
- To conduct the nation’s monetary policy,
- To provide and maintain an effective and efficient payments system, and
- To supervise and regulate banking operations.
The Federal Reserve has a unique public/private structure that operates independently within government but not independent of it. The quasi-government structure provides accountability while avoiding centralized, governmental control of banking and monetary policy. The Federal Reserve is fiscally independent because it receives no government appropriations. The Federal Reserve funds its activities with the interest earned from loans to banks and investments in government securities and from the revenue received from providing services to financial institutions.