Federal Reserve System (FED)

The Federal Reserve System, also called Fed is the United States Central Bank, it is located in Washington. It was created on December 23, 1913 by the Federal Reserve Act. The Fed, currently run by Mister Ben Bernanke, has as a mission to put in place the American monetary policy. As the ECB, it is independent from political power.

The Fed, thanks to its monetary policy, has to look after price stability, full employment and must help American growth. Of course, it must regulate the American banking activity and be a lender as a last resort for commercial banks.

The American Central Bank made up of 12 federal Reserve Banks located in the more important  cities of the United States (New York, San Francisco, Chicago, Richmond, Atlanta, Boston, Dallas, Cleveland, Philadelphia, Kansas City, Saint-Louis, Minneapolis) and with the Governors central council located in Washington. The New York Federal Reserve Bank is the most important one in the United States.

The Fed applies its monetary policy after the FOMC (Federal Open Market Committee) meetings which get together 8 times a year, that is to say every 6 or 7 weeks. This committee is made up of the Board of Governors (7 members appointed by the United States president and approved by the Senate), with New York’s Federal Reserve Bank president and alternately 4 other governors of the Federal reserve Bank.

The two meetings with the greatest importance are at the beginning as well as the middle of the year.  These two meetings which exceptionally last 2 days make the committee talk about the Monetary Policy Report to the Congress; this is a report about the American monetary policy that is given by the president of the Board of Governors before the American Congress.

The Fed governor since January 31, 2006, Ben Bernanke was preceded by Alan Greenspan (governor from August 11, 1987 to 2006) and before him by Paul Volcker (from August 6, 1979 to August 11, 1987).