What is the Board of Governors?

Mary McMahon
Mary McMahon

The Board of Governors is the organization at the head of the Federal Reserve banking system in the United States. The members of the board make important decisions about monetary policy that are intended to promote a healthy and growing American economy. They also oversee operations at the Federal Reserve Bank (or Fed), and they keep an eye on the general condition of the economy. The organization is headquartered in Washington, DC, and almost 2,000 people work in its the offices.

The Federal Reserve System is run by a board of governors, which has seven members appointed by the President of the United States.
The Federal Reserve System is run by a board of governors, which has seven members appointed by the President of the United States.

The Fed itself was created by the Federal Reserve Act of 1913, which was designed to create a central banking system for the United States. The act included a provision to establish a Board of Governors to oversee the Fed, stipulating that the group would be an independent government agency. Although members of the board are appointed by the president and confirmed by Congress, they operate on their own, without funding from Congress and ideally without political pressure.

The main offices of the Federal Reserve Board of Governors are in Washington, D.C.
The main offices of the Federal Reserve Board of Governors are in Washington, D.C.

There are seven people on the board, and under the terms of the Federal Reserve Act, no two governors come from the same Federal Reserve district. The appointees are supposed to represent a wide cross-section of interests, from agriculture to manufacturing, to ensure that the many facets of the American economy are considered when it makes decisions. With 12 districts to choose from, not every district is represented at all times.

Each board member serves for 14 years, and the appointments are designed to stagger so that one board member leaves every two years. This ensures that no one president has too much control over the operations. If members serve their full terms, a president will be able to appoint two while he or she is in office. This is intended to promote an apolitical stance for the Board of Governors.

Many Americans are familiar with the chairman of the Board of Governors, who tends to be a high profile figure. The president selects the chair and vice-chair from the members of the board, and this selection is also confirmed by Congress. In a remarkable demonstration of the apolitical nature of the organization, presidents of different political parties have sometimes chosen the same individual to serve as chairman. Once a board member has served his or her 14 years, the board member cannot be appointed again.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

You might also Like

Readers Also Love

Discussion Comments

anon68391

To whoever made the first comment about cutting mail delivery to three days, you must have no heart or conscience.

Cutting labor means cutting people's hours or even firing hard working people. That is the last thing this economy needs in order to recover. Less money being made means less going into the economy.

Also, people who would lose hours or their jobs have to explain this to their families when there is no food on the table, no clothes on their back, or a roof over their head. Wake up people! That is the kind of greedy, immoral thinking that will destroy us.

anon41076

Why is the United States post office advertising on the Glen Beck show? The Post Office should be above anything political. It is shameful that the money we pay for stamps is going into Beck's pockets.

anon29800

*If* that happened, there would be thousands of people laid off and no jobs. I would be one of them.

anon25508

Does the U.S. Postmaster general have an e-mail address? I want to e-mail my comments to his office directly!

If any of the postal big-shots read this, i want to suggest that residential mail be delivered only 3 days per week by the post office,on monday,wednesday,and friday!

This will cut down on fuel, labor and wear and tear on equipment. The average person just gets junk mail most of the time, or magazines, coupons, or ads and can live a few days without it! Lets be real here, why work so hard when you don't have to. Postal workers should be off on week-ends with the family enjoying life and relaxing! We need to enjoy and relax more, and have less stress. Maybe a schedule of monday to thursday should be considered and have a 3 day week end every week!! That sounds like an even better idea! What do you think about it? More importantly, what does the us postmaster think about it! I'm for a shorter work week!

Post your comments
Login:
Forgot password?
Register: