Fed Reorganizes Central Banking Responsibilities Among Three Bodies

The Federal Reserve System has been reorganizing its central banking responsibilities among three main bodies: the national Board of Governors, 12 regional Reserve Banks, and the Federal Open Market Committee (FOMC).

This division was established by the Federal Reserve Act of 1913 to help the United States respond to banking system stress.

The Board oversees the Reserve Banks, which handle regional operations such as supervising and examining financial institutions, lending to depository institutions, processing payments, and gathering information about economic conditions in their districts.

The FOMC determines the stance of monetary policy with 12 voting members: the seven governors, the president of the Federal Reserve Bank of New York, and four other Reserve Bank presidents whose seats rotate on one-year terms.