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Revised Jun e 1981 33 O ^ 50 0 ^) O GO O 0) CO _ ^ CD Q. § |g — 0 3) 3 ® » p b .® ■ I s ® § s ® CD O 3 -*• cn *< 05 CD 3 4 . ■" ■ A SERIES O N TH E S T R U C TU R E O F TH E FEDER AL RESERVE S Y STE M Federal Reserve Bank Board of Directors \ * « < T1 ■ M ■ CO O S CD -Q 0 o “ ® a 5 : t V - n » \ v V % ( » ’ ^ ^ T' *Z<C- <C <b' «- ^ \ , % 6 ^ 'C- n1 * <C V * <\ ^ ^ ^ H ^ '? ' go ^ ST n o cq tD ® O 03 B J < 3 — (D Q S % % » ^ V v \^ ^ 30 3 O 0 ) C/) . (DO Tl «2 ,7 <D Tl 0) * -v v \ ^ ^ v W\ x ^ <X H f N S ^ ‘ 1'4 * , M, 5 T <o ^ \h \ . *=> 6 ^ * \ *• 6 ^ ^ . * 0 , H $ v ^ - c , 1 ^ e > _ ^ For th e purpose o f carrying o u t the d ay -to -d a y opera tions o f the Federal Reserve System — th e nation's central bank — the U n ited States has been divided into 12 Federal Reserve D istricts, each w ith a Reserve Bank. Reserve Banks provide m any services to depository institutions and to th e general public, such as processing coins, curren cy, and checks. T h ey exercise m any o f the bank supervisory responsibil ities o f the System . T h e y also help in fram ing m o n etary p o lic y, in part by reporting on econom ic developm ents in th e ir regions. Regional representation is provided fo r through the selection o f Reserve Bank D irectors. T h e Federal Reserve A c t o f 1 9 1 3 calls fo r each o f the 12 Reserve Banks to be managed by a board o f nine directors w ho kn o w the interests o f the d is trict. S im ila rly , each o f th e 2 5 branches o f the Reserve Banks is managed by five to seven directors w ho represent th e interests o f th e branch te rrito ry . Selection and Representation Responsibilities F or purposes o f selection and re p re se n ta tio n , Reserve Bank A lth o u g h d ire c to rs h ip s are n o t " f u ll- t im e '' jo b s, th e responsi d ire c to rs are d ivid e d in to th re e classes o f th re e persons each. b ilitie s o f d ire c to rs are b ro a d , ranging fro m th e general Class A d ire c to rs are representative o f th e m em ber c o m m e r managem ent o f th e Reserve B ank — assigned by th e Federal cial banks in th e d is tr ic t and are u su ally bankers. Class B Reserve A c t — to m aking re co m m e n d a tio n s on m o n e ta ry d ire c to rs and Class C d ire c to rs are selected w ith due co n sid e r p o lic y . a tio n to th e interests o f a g ric u ltu re , com m e rce, in d u s try , services, la b o r, and consum ers. T hus b o th th e pro vid ers and D irectors a p p o in t th e Reserve Bank pre sid ent (the c h ie f the users o f b a n kin g services in th e d is tr ic t are represented executive o ffic e r) and th e fir s t vice pre sid ent (the c h ie f a d m in on th e B ank's bo ard . Class A and Class B d ire c to rs are elected istrative o ffic e r) to five -ye a r term s, subject to approval b y the by m em b er banks in a d is tr ic t, w h ile Class C d ire c to rs are Board o f G overnors. T he Reserve Bank d ire c to rs also a p p o in t a p p o in te d b y th e S ystem 's Board o f G ove rn ors in W ashington. all o ffic e rs o f th e bank. T he ch a irm an and d e p u ty ch a irm a n o f each nine -m e m be r A n n u a lly , th e y a p p o in t th e d is tric t's representative to th e board are selected by th e Board o f G ove rn ors fro m th e C Federal A d v is o ry C o u n c il, w h ic h confers fo u r tim e s a year d ire c to rs to serve one-year term s. These d ire c to rs , w h o m ust w ith the B oard o f G ove rn ors on business c o n d itio n s and makes be d is tric t residents fo r at least tw o years, are o fte n educators, reco m m e n d a tio n s on issues a ffe c tin g the System . c o m m u n ity leaders, law yers, and re tire d business people. D ire cto rs are responsible fo r each Reserve B ank's budget and D ire cto rs c a n 't be m em bers o f Congress. F u rth e r, Class B and e xp en ditu re s. T h e y also review th e annual in te rn a l a u d it Class C d ire c to rs c a n 't be o ffic e rs , d ire c to rs o r em ployees program o f th e Reserve Bank. The Reserve Banks also are o f any bank. N o r can Class C d ire c to rs o w n sto ck in any bank. a udited by th e Board o f G overnors. A d d itio n a lly , since a Reserve Bank d ire c to rs h ip is a fo rm o f p u b lic service, d ire c to rs are also exp ected to avoid p a rtic ip a D ire cto rs p ro v id e advice to th e B ank's pre sid ent fo r m eetings tio n in partisan p o litic a l a c tiv itie s . o f th e Federal O pen M a rk e t C o m m itte e —th e to p m o n e ta ry In electin g Class A and B d ire c to rs , d is tr ic t m em b er banks are play a d ire c t role in th e fo rm u la tio n o f m o n e ta ry p o lic y . p o lic y -m a k in g u n it o f th e Federal Reserve S ystem . T h e y also grouped by th e a m o u n t o f ca p ita l in to th re e categories — sm all, S p e c ific a lly , th e Federal Reserve A c t requires d ire c to rs to set m e d iu m , and large. Each g ro u p o f banks elects one Class A and the bank's d is c o u n t rate every tw o weeks, subject to d e te r one Class B d ire c to r. m in a tio n and review o f th e Board o f G overnors. The d is c o u n t rate is the in te re st rate d e p o s ito ry in s titu tio n s pay w hen b o r Reserve Bank branch d ire c to rs are n o t elected. T he m a jo rity ro w in g fro m th e Federal Reserve fo r te m p o ra ry , em ergency are a p p o in te d b y th e Reserve B ank's head o ffic e d ire c to rs ; the o r seasonal needs. By raising o r lo w e rin g th e rate, the System re m a ind er, b y th e Board o f G ove rn ors. T he cha irm an is se can in flu e n ce th e cost and a v a ila b ility o f m on ey and c re d it. lected fro m those a p p o in te d by th e B oard o f G overnors. O verall, d ire c to rs b rin g to th e Federal Reserve a broad range D ire c to rs h ip s o f Reserve Banks and branches g e ne rally are o f experience in m anagem ent, c o m m u n ity goals, and d e ve lo p lim ite d to one o r tw o fu ll thre e -ye a r te rm s to assure th a t a m ents in th e fin a n c ia l system and in local econom ies. T h a t greater nu m b e r o f people w ill serve on th e boards, representing experience provides th e Federal Reserve w ith a w id e r range a w id e range o f interests. o f expertise and w ith greater in fo rm a tio n a b o u t c o m m u n ity needs tha n n o rm a lly w o u ld be available to a p u b lic in s titu tio n .
@FedFRASER