Monetary Policy

Federal Reserve Board (FRB)

What is the Federal Reserve Board (FRB)?

The Federal Reserve System Board of Governors, also known as the Federal Reserve Board (FRB), is the governing body of the Federal Reserve System. The FRB was established under the Banking Act 1935. The statutory mandate of members is to “equitably represent the financial, agricultural, industrial and commercial interests and geographic divisions of the nation”.

key takeaways

  • The Federal Reserve Board (FRB) is the governing body of the Federal Reserve System, the central bank of the United States.
  • The FRB is an independent, non-governmental agency responsible for implementing monetary policy through open market operations or setting interest rates.
  • The FRB consists of seven members, including a chairman, appointed by Congress from among the regional Federal Reserve Banks.

How the Federal Reserve Board (FRB) works

The Federal Reserve System Board of Governors, referred to as the Federal Reserve Board or FRB, is a seven-member body that manages the Federal Reserve System, the U.S. central bank responsible for setting the nation’s monetary policy.

The FRB is considered an independent agency of the federal government. The Federal Reserve’s statutory mission is to achieve maximum employment and stable prices at moderate long-term interest rates, and the FRB chairman and other officials frequently testify before Congress, but its monetary policy is independent of the legislative or executive branches, and its structure is similar to that of a private agency corporation.

Appointments, Terms and Roles

Members of the FRB are appointed by the President and confirmed by the Senate. Each is appointed for a 14-year term, but can serve shorter or longer terms. The new board members, if any, will serve for the remainder of the outgoing members’ terms. New members may be reappointed for a full term.

If replacements are not confirmed at the end of their term, they can continue to serve, so members may serve longer than 14 years. However, the president can remove a member from the board if there is a good reason. Terms are staggered, so a new one starts every two years. Once appointed, each board member operates independently.

The Chairman and Vice-Chairman who oversee the Federal Reserve Board are appointed by the Chairman from among the existing members of the Board for a four-year term. They may be reappointed to these leadership positions as many times as possible, within the term limits permitted by board members.

The Council includes several subcommittees and their chairs and vice-chairs. These are the Board Affairs Committee; Consumer and Community Affairs; Economic and Financial Monitoring and Research; Financial Stability; Federal Reserve Banking Affairs; Oversight and Regulation; Payments, Clearing and Settlement; and the Small Regional and Community Banking Subcommittee.

Below is the current list of members of the Federal Reserve Board:

Current Federal Reserve Board
Jerome H. Powell (Chairman)
Vice-Chairman – currently vacant (as of January 20, 2022)
Oversight Vice Chair – currently vacant seat (as of January 20, 2022)
Michelle W Bowman
Lyle Brainard
Christopher Waller
Seats are currently empty

Responsibilities of the Federal Reserve Board (FRB)

A member of the Federal Reserve Board’s most important role is as a member of the Federal Open Market Committee (FOMC), which is responsible for determining open market operations on the federal funds rate, one of the most important benchmark rates for the global economy. In addition to the seven presidents, the FOMC also includes the president of the Federal Reserve Bank of New York and four other branch presidents on a rotating basis. The chairman of the FRB is also the chairman of the Federal Open Market Committee.

The FRB is directly responsible for two other monetary policy tools, the discount rate (based on regional branch recommendations) and reserve requirements. It also oversees the Fed’s 12 regional branches.

Related Posts

1 of 2,105

Leave A Reply

Your email address will not be published.