how the federal reserve board frb works
the board of governors of the federal reserve system called the federal reserve board or frb for short is a seven member body that governs the federal reserve system the u s central bank in charge of making the country s monetary policy 1the members of the u s senate confirmed frb are considered an independent agency of the federal government 4 the fed has a statutory mandate to maximum employment and stable prices at moderate long term interest rates and the frb chair and other officials frequently testify before congress however it makes monetary policy independently of the legislative or executive branches and is structured like a private corporation 5the vice chairman is required to appear before the senate and the house of representatives the vice chairman is also required at semi annual hearings to discuss efforts activities objectives and plans of the board 6appointments terms and rolesthe president appoints the frb s members and they are confirmed by the senate each is appointed to a single 14 year term but may serve shorter or longer periods a new board member serves the remainder of the outgoing member s term if any the new member may then be reappointed to one full term 1if a replacement has not been confirmed when that term expires they may continue to serve so that it is possible for a member to serve for much longer than 14 years however the president is allowed to remove a member from the board given sufficient cause terms are staggered so that a new one begins every two years 6 once appointed each board member operates independently 1the chair and vice chair for the supervision of the federal reserve board are appointed to four year terms by the president from among the board s existing members they can be reappointed to these leadership roles as many times as their term limits as board members allow 1the board of governors includes several subcommittees with their chairs and vice chairs these are the committees on board affairs consumer and community affairs economic and monetary affairs financial stability federal reserve bank affairs supervision and regulation payments clearing and settlement and the subcommittee on smaller regional and community banking 7here is the current list of federal reserve board members 8duties of the federal reserve board frb the federal reserve board members most important role is as members of the federal open market committee fomc which is in charge of the open market operations that determine the federal funds rate one of the global economy s most important benchmark interest rates in addition to the seven governors the fomc consists of the president of the federal reserve bank of new york and a rotating set of four other branch presidents the chair of the frb also chairs the fomc 9the frb is directly in charge of two other monetary policy tools the discount rate based on suggestions from the regional branches and reserve requirements 10 it is also tasked with supervising the fed s 12 regional branches 1administration of the federal reserve board officersthe board s principal offices are located in the district of columbia at board meetings the chairman presides and in the chairman s absence the vice chairman takes over if both the chairman and vice chairman are absent the board can elect a member to act as chairman pro tempore funds collected through assessments on federal reserve banks are used to cover expenses and salaries of board members board members are prohibited from holding positions or stock in banks banking institutions or trust companies each board member must certify this fact under oath as part of their service 6