The Federal Reserve System, or The Fed, is the central Bank of The United States. The Fed is the bank for the government and other banks. It was originally created to provide a safer, more flexible, and more stable money system. The Fed is a network of 12 banks under the oversight of the Board of Governors. A particularly severe crisis in 1907 led to the creation of the Federal Reserve Act.
Woodrow Wilson created the Fed on December 23, 1913. This included dividing the United States into 12 regions. The banks are named after the city in which they are located. The list is Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
The Chicago Reserve Bank serves the Seventh Federal Reserve District, which encompasses the northern portions of Illinois and Indiana, southern Wisconsin, the Lower Peninsula of Michigan, and the state of Iowa.
A key part of the system is the Board of Governors. The board is made up of seven members who serve 14-year terms. They are appointed by the President and confirmed by the Senate. The board is led by a chairman and vice chairman who are appointed from the panel.
The Federal Reserve has many responsibilities including:
- Maintaining the nation's monetary policy – stabilize employment, prices, and rates
- Regulating banking institutions – assure the safety of consumer’s money
- Providing financial services – processing checks, electronic payments, and distributing money to consumer banks
- Conducting research – staying informed on the economy in the US and abroad
- Educating consumers – publishing information about banking through print, website, seminars, and speeches