Congress created the Federal Reserve (popularly known as the "Fed") as an independent entity to attend to the nation's credit and monetary needs without undue influence from political pressures. The current structure of the system has three major components established by the original act. Monetary Policy

A central responsibility of the Board of Governors of the Federal Reserve System is the formulation of monetary policy. Federal Reserve Banks

The 12 Federal Reserve Banks carry out the day-to-day operations of the Federal Reserve System. The Federal Reserve Banks provide fiscal agency and depository services to the federal government. The 12 Reserve Banks provide banking services to depository financial institutions. Avenues of communication and oversight, both formal and informal, have developed over time. Aside from its appointment role, Congress exercises oversight in a variety of ways. 111-203 , the Dodd-Frank Wall Street Reform and Consumer Protection Act, was enacted on July 21, 2010. The omnibus financial regulatory reform law contains provisions that change the supervisory authority of the Federal Reserve Board and affect the operations and structure of Federal Reserve Board and the 12 Reserve Banks. Under the provisions of P.L. A member of the board would be designated by the President, with the advice and consent of the Senate, to serve as vice chairman for supervision.
In 1913, Congress created the Federal Reserve System to serve as the central bank for the United States. The Federal Reserve formulates the nation's monetary policy, supervises and regulates banks, and provides a variety of financial services to depository financial institutions and the federal government. The system comprises three major components: the Board of Governors, a network of 12 Federal Reserve Banks, and member banks.
Congress created the Federal Reserve as an independent agency to enable the central bank to carry out its responsibilities protected from excessive political and private pressures. At the same time, by law and practice, the Federal Reserve is accountable to Congress. The seven members of the board are appointed by the President with the advice and consent of the Senate. Congress routinely monitors the Federal Reserve System through formal and informal oversight activities.
This report examines the structure and operations of the major components of the Federal Reserve System and provides an overview of congressional oversight activities. The report identifies the provisions of P.L. 111-203 (the Dodd-Frank Wall Street Reform and Consumer Protection Act) that affect the structure and operations of the system.
This report will be updated as events warrant.