Option Investor
Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Federal Reserve System

The Federal Reserve System is the central banking system for the United States, and was established in 1913 by the Federal Reserve Act. Governed by the Federal Reserve Board, the 12 Federal Reserve Banks, their 24 branches and all national and state member banks make up the Federal Reserve System. The Federal Reserve System was created to regulate the national money supply and flow, set reserve requirements, regulate credit and monitor member banks in the United States. Members of the Federal Reserve Board are appointed by the President of the United States and are confirmed by the Senate. Still, the Federal Reserve System is considered to be an independent entity, with a responsibility to make decisions free of political influence.