What is the Federal Reserve Board? The Federal Reserve Board is also known as the board of Governors of the Federal Reserve System. It is the governing body of the Federal Reserve System. Now, what does the Federal Reserve System means? The Federal Reserve System is the central bank of the United States and it was founded in 1913 to offer the nation a safer and more secured financial and monetary system. However, the Federal Reserve Board was established in 1935 by the banking act. The members are tasked to give a fair representation of the industrial, agricultural, financial, and geographical divisions and commercial interests of the country.
Furthermore, the Federal Reserve Board (FRB) is an independent NGO that is in the position of conducting monetary policy through market operation and setting interest rates. The Federal Reserve Board is made up of seven members appointed by congress from the Federal Reserve banks. They perform functions to promote the operations of the economy at large.
The Federal Reserve System board plays a key role in the U.S monetary policy. They supervise the work of the reserve banks and provide different financial services to the United States government and national banks. FRB is committed to supporting responsible fintech innovation both by the financial market broadly and firms we regulate directly. Do you want to learn more about the FRB? Well, you are so lucky. In this article, I will be talking about the Federal Reserve System and how it works. Just follow the article to the very end.
Who Appoints the Federal Reserve Board Members?
The president of the Federal Reserve board appoints the Federal Reserve board members and they get confirmed by the senate. Each individual is appointed to a single 14-year term but may serve longer or shorter periods. A new member will now serve the remainder of the outgoing member if there is any. However, the new member may be reappointed to a full time. If a replacement is not confirmed when the term gets expired, the individual may continue to serve. So, it is very possible for a member to serve longer than 14 years
Nevertheless, only the president is allowed to remove a member from the board for a good reason. No other person has the legal right to remove a member from the board. Once the individual is appointed, they get to operate independently with no interruption whatsoever.
What Are the Duties of the Federal Reserve Board?
The most important role of the Federal Reserve board members is like the members of the ‘’federal open market committee’’. They are in charge of the open market operations that determine the fund rate, one of the economy’s important benchmark interest rates. Furthermore, the FRB is in charge of two monetary policy tools, discount rate, and reserve requirements. FRB is also tasked to supervise the Federal Reserve systems regional branches. Like I stated above, they play a very important role in the federal reserve system.