The Federal Reserve System

Federal Reserve Act of 1913

The Act of Congress that created the Federal Reserve System.

Primary purpose of the Federal Reserve

To regulate the money supply and supervise the banking system.

Ownership of the Fed

Member banks own stock in the Fed and vote on directors.

Board of Governors composition

7 members appointed by the President and confirmed by the Senate.

Congressional body with Fed confirmation power

The Senate only (not the House of Representatives).

Board of Governors term length

14 years

Board of Governors re-appointment rule

Members cannot be reappointed unless finishing an unexpired term.

Staggering of Board of Governors terms

One governor position opens up every 2 years.

First female Chair of the Federal Reserve

Janet Yellen (appointed by President Obama)

Current / Incoming Fed Chair per notes

Kevin Warsh (sworn in May 22, 2026)

Number of Federal Reserve Districts

12 district banks

Function of Fed District Banks

Accept deposits from and make loans to depository institutions.

Federal Open Market Committee (FOMC) composition

7 Board of Governors members and 5 District Bank presidents.

FOMC meeting frequency and location

Meets 8 times a year in Washington, D.C.

Primary function of the FOMC

Acts as the Fed's primary monetary policy-making body.

Effect of contracting the money supply

Reduces money supply and causes interest rates to rise.

Fed membership requirement for national banks

National banks must join; state banks can choose to join.

Fed Reserve Requirement scope

Applies to all depository institutions, regardless of Fed membership.

Voting structure of District presidents on the FOMC

5 presidents vote at a time on a rotating basis (NY is permanent).

Examples of national banks belonging to the Fed

Chase, Bank of America, Wells Fargo, and Citibank.

Regulatory obligation of non-member state banks

State banks must still comply with Fed laws and regulations.

Other notable former Fed Chairs

Alan Greenspan, Ben Bernanke, and Jerome Powell.