Economics Essay Example | Topics and Well Written Essays - 1000 words - 4

Economics - Essay Example (Simpson, et al., 1) The Federal Reserve System is made up of twelve regional banks located in San Francisco, Dallas, Kansas City, Minneapolis, Chicago, St. Louis, Atlanta, Cleveland, Richmond, Philadelphia, New York, and Boston. Private banks own stock in the twelve regional banks, this is what funds the twelve Federal Reserve Regional banks. The twelve regional banks are made up of regions listed below: Another component of the Federal Reserve System is the Federal Reserve Board of Governors. The Federal Reserve Board of Governors is appointed by the President of the United States of America, but confirmed by the Senate. The seven member board serves can only serve a maximum of fourteen years, with a member serving one term at time of two years. The only exception is the Chairman of the Board and the Vice Chairman, who serve four year terms. However, the fourteen year limit also applies to them. The only way a board member can be removed is by the president for cause. The current board members are Ben S. Benmanke, Chairman, Donald L. Kohn, Vice Chairman, Susan Schmidt Bies, Kevin M. Warsh, Randall S. Krosnzer, and Frederic S. Mishkin (The Federal Reserve Board). This Board of Governors is an independent governmental agency. They oversee the twelve regional banks, plus the numerous private banks owning stock in the regional reserve banks. The Federal Open Market Committee (FOMC) is a committee made up of the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, plus four other Federal Reserve Regional Bank presidents that serve on a alternate schedule. This committee reviews the open market. The open market being the buying and selling of government securities. This way the committee can determine monetary and credit conditions. The FOMC also oversees the foreign currency exchange rate. The FOMC is extremely important part of the Federal Reserve System,