The Federal Reserve System is the central banking structure of the U.S. Its establishment dates back to 23 December 1913 with the enactment of the Federal Reserve Act.
As time has passed, the responsibilities and roles of the Federal Reserve System have augmented and its basic structure has changed. Major economic events like the Great Depression were crucial in shaping the changes taking place in this system. Today, its duties are to regulate and supervise banking institutions, conduct the national monetary policy, offering financial services to the U.S government, foreign official and depository institutions and maintain stability of national financial system. Its task is also to maintain stability of prices, maintain employment and regulate the monetary policy for maintaining the moderateness of the interest rates. The components of this system also conduct supervision of banks, provide financing services and carry out research on the American economy and the economy of nations in the region.
The Federal Reserve System consists of a Board of Governors also called Federal Reserve Board (which the president of the U.S appoints), the FOMC or Federal Open Market Committee, private American member banks, several advisory councils and 12 Federal Reserve Banks that are regional. The responsibility of deciding the monetary policy is upon the FOMC, which consists of seven members from the Board of Governors along with presidents of twelve provincial/regional banks. However, the presidents of only five banks have the power to vote at the given time. It consists of both the public and private components and is for serving the interests of private bankers as well the general public.
As per the Board of Governors, the decisions for monetary policies that the Federal Reserve System makes do not need the approval of the U.S president or someone else in legislative or executive branches. The President chooses the members in the Board of Governors including vice-chairman and the chairman, and the Senate confirms them. The government appoints and decides the salaries of employees of the highest level of the Federal Reserve System, thus giving it both public and private characteristic.