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The US Federal Reserve, established in 1913, is the USA’s central bank, regulating the financial system, deciding monetary policy and supervising banks in the country.
The system has three entities: The Board of Governors in Washington, DC, 12 regional Federal Reserve Banks and the Federal Open Market Committee (FOMC).
The Board has seven members, appointed by the US President and confirmed by the Senate, serving staggered 14-year terms to ensure continuity and independence.
These banks each serve a specific district, acting as the operating arms of the system. They supervise banks, lend to institutions and manage regional economic data collection.
The 12 banks distribute physical currency, operate payment systems and manage Treasury accounts of the US government.
This is a 12-member body that meets at least eight times a year and makes important decisions on interest rates and the USA’s monetary policy to regulate the economy.
The Fed determines the monetary policy by setting interest rates, managing the money supply in the country and influencing economic activity in the US.
The Fed also supervises financial institutions in the US to maintain stability, enforce consumer protection laws and analyse risks, preventing crises.
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