The Federal Reserve system in the United States consists of three key entities…
The Board of Governors
12 Federal Reserve Banks
The Federal Open Market Committee (FOMC)
The Federal Reserve serves as a “Bank to banks.” Together, the three entities have five functions:
- Set monetary policy, to promote maximum employment and stable prices.
- Promote stability in the financial system through minimizing systemic risks.
- Promote the safety and soundness of individual financial institutions.
- Foster payment and settlement system safety and efficiency for banks and the Federal Government.
- Promote consumer protection and community development.