Federal Bank Regulatory Agencies of the United States
The Federal Reserve System
Established by the Federal Reserve Act in 1913, the Federal Reserve System is headed by a seven-member Board of Governors. Each is appointed to 14-year terms by the President of the United States. Why 14 years? To keep the President of the United States from selecting a majority of the Governors.
The Board of Governors is headquartered in Washington D.C.
While the Board of Governors are the head of The Federal Reserve System, it comprises 12 Federal Reserve Banks and 25 branches located throughout the country. Each Federal Reserve Bank has a a board of nine (9) directors. Six are elected by the member banks from its district. The other 3 are appointed by the Board of Governors.
Of the directors elected by the member banks, 3 represent member banks and 3 are from the business community. The 3 directors appointed by the Board of Governors are selected to represent the public (which basically means the Board of Governors).
The Federal Reserve System directly supervises (i.e. enforces) state-chartered banks that choose to become members. In addition to bank supervisory responsibilities, the Federal Reserv reviews membership applications from state banks and, together with state authorities, merger and branch proposals from state member banks.
The reason a state bank becomes a member bank is to bypass state banking laws and regulations. Or, at the very least, to avoid supervision by the state in which it operates. This gives the Federal Reserve control over a state's bank community and can override local concerns in favor of Federal Reserve interests.
Established by the Federal Reserve Act in 1913, the Federal Reserve System is headed by a seven-member Board of Governors. Each is appointed to 14-year terms by the President of the United States. Why 14 years? To keep the President of the United States from selecting a majority of the Governors.
The Board of Governors is headquartered in Washington D.C.
While the Board of Governors are the head of The Federal Reserve System, it comprises 12 Federal Reserve Banks and 25 branches located throughout the country. Each Federal Reserve Bank has a a board of nine (9) directors. Six are elected by the member banks from its district. The other 3 are appointed by the Board of Governors.
Of the directors elected by the member banks, 3 represent member banks and 3 are from the business community. The 3 directors appointed by the Board of Governors are selected to represent the public (which basically means the Board of Governors).
The Federal Reserve System directly supervises (i.e. enforces) state-chartered banks that choose to become members. In addition to bank supervisory responsibilities, the Federal Reserv reviews membership applications from state banks and, together with state authorities, merger and branch proposals from state member banks.
The reason a state bank becomes a member bank is to bypass state banking laws and regulations. Or, at the very least, to avoid supervision by the state in which it operates. This gives the Federal Reserve control over a state's bank community and can override local concerns in favor of Federal Reserve interests.
Labels: board of governors, branch, Fed, federal reserve system, national banks, regulation, state, supervise
posted by Don Marchand at 9:22 AM
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