PART 1
1. Discuss the “Federal Reserve and Its Relationship to the Public”, slide 10, power
point week 10, page 292-293, required book.
The Federal Reserve and Its Relationship to the Public begins with the Board of Governors being
at the top. They are the central authority of the U.S. money and banking system. There are 7
members and each of them are chosen by the president with the advice of the Senate. The Board
of Governors then connect to the Federal Open Market Committee (FOMC) and the 12 Federal
Reserve Banks. FOMC aids the Board of Governors in conducting monetary policy and contains
12 members. These 12 members include the seven members of the Board of Governors, the
president of the New York Federal Reserve Bank, and four of the remaining presidents of the
Federal Reserve Banks on a 1 – year rotating basis. The 12 Federal Reserve Banks, also
connected to the FOMC, is a blend of private and public control and they collectively serve the
nation’s “central bank.” 12 Federal Reserve Banks is then connected to the commercial banks
and thrift institutions. The commercial banks are private banks charted by the individual states to
operate within those states. There are approximately 6,000 commercial banks; roughly three –
fourths of the state’s banks. Then there are the thrift institutions which are credit unions that are
regulated agencies in addition to the Board of Governors and the Federal Reserve Banks. Finally,
there is the public including households and businesses. Each of them are connected and in
