Frequently Asked Questions
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What are Federal Reserve Banks?
What is the relationship of the Board of Governors to the Federal Reserve Banks?
How many Federal Reserve Banks are there, and where are they located?
Do District boundaries follow state lines?
Why is there only one District for the West Coast and more Districts toward the East and Midwest?
Are the Federal Reserve Banks private companies?
How do Federal Reserve Banks differ from commercial banks?
Who are the Federal Reserve Bank presidents?
Are Federal Reserve Bank employees considered government employees?
How many checks are processed by the Federal Reserve Banks?
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What are Federal Reserve Banks?
Federal Reserve Banks were established by Congress as the operating arms of the nation's central banking system. Many of the services provided to depository institutions and the federal government by this network of Reserve Banks are similar to services provided by commercial banks and thrift institutions to business customers and individuals.
Reserve Banks
- hold the cash reserves of depository institutions and make loans to them
- move currency and coin into and out of circulation, and collect and process millions of checks each day
- provide checking accounts for the Treasury, issue and redeem government securities, and act in other ways as fiscal agent for the U.S. government
- supervise and examine commercial banks that are members of the Federal Reserve System for safety and soundness
- participate in the activity that is the primary responsibility of the Federal Reserve System, the setting of monetary policy.
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What is the relationship of the Board of Governors to the Federal Reserve Banks?
In public debate prior to passage of the Federal Reserve Act, some private-sector bankers expressed concern that a central bank governed by a Board of Governors appointed by the government would not be sufficiently responsive to the needs of the financial community. Certain agrarian interests, on the other hand, felt that an independent central bank would yield too much control over monetary affairs to the private banks. As a result, the Federal Reserve System was structured with two levels of authority--the Board of Governors, located in Washington, D.C., has a centralized and supervisory public influence over the Reserve Banks, while the individual Reserve Banks maintain narrower control over their own day-to-day operations.
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How many Federal Reserve Banks are there, and where are they located?
There are twelve Federal Reserve Banks, one in each of the twelve Federal Reserve Districts (see map of the Federal Reserve System).
1st District--Boston
2nd District--New York
3rd District--Philadelphia
4th District--Cleveland
5th District--Richmond
6th District--Atlanta
7th District--Chicago
8th District--St. Louis
9th District--Minneapolis
10th District--Kansas City
11th District--Dallas
12th District--San Francisco
Do District boundaries follow state lines?
The District boundaries follow state lines, with some exceptions:
- 1st District, Boston. Connecticut (excluding Fairfield County), Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont
- 2nd District, New York. New York State, twelve counties in northern New Jersey, Fairfield County in Connecticut, Puerto Rico, and the Virgin Islands (District map)
- 3rd District, Philadelpha. Eastern Pennsylvania, southern New Jersey, and all of Delaware (District map)
- 4th District, Cleveland. Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia (District map)
- 5th District, Richmond. Maryland, Virginia, North Carolina, South Carolina, and most of West Virginia (District map)
- 6th District, Atlanta. Alabama, Florida, Georgia, and parts of Louisiana, Mississippi, and Tennessee (District map)
- 7th District, Chicago. Iowa and most of Illinois, Indiana, Michigan, and Wisconsin
- 8th District, St. Louis. Arkansas and portions of six other states: Missouri, Mississippi, Tennessee, Kentucky, Indiana, and Illinois (District map 99 KB PDF)
- 9th District, Minneapolis. Minnesota, Montana, North Dakota, South Dakota, twenty-six counties in northwestern Wisconsin, and the Upper Peninsula of Michigan
- 10th District, Kansas City. Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and Western Missouri
- 11th District, Dallas. Texas, northern Louisiana, and southern New Mexico
- 12th District, San Francisco. Nine western states--Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington--and American Samoa, Guam, and the Northern Mariana Islands
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Why is there only one District for the West Coast and more Districts toward the East and Midwest?
The location of Federal Reserve District boundaries, and of the Banks within the Districts, was determined mostly by the geographic distribution of the U.S. population at the time the Federal Reserve System was created (1913), to accommodate local needs.
Over time, Branches of the Reserve Banks have been added to accommodate changing needs. The Federal Reserve Bank of San Francisco, for example, has four Branches--in Seattle, Portland, Salt Lake City, and Los Angeles. (Map of Federal Reserve System (82 KB PDF) showing Districts, Banks, and Branches)
Are the Federal Reserve Banks private companies?
The Federal Reserve Banks, created by an act of Congress in 1913, are operated in the public interest rather than for profit or to benefit any private group.
Commercial banks that are members of the Federal Reserve System hold stock in the Reserve Bank in their region, but they do not exercise control over the Reserve Bank or the Federal Reserve System. Holding stock in a regional Reserve Bank does not carry with it the kind of control and financial interest that holding publicly traded stock affords, and the stock may not be sold or traded. Member banks do, however, receive a fixed 6 percent dividend annually on their stock and elect six of the nine members of the Reserve Bank's board of directors.
Although they are set up like private corporations and member banks hold their stock, the Federal Reserve Banks owe their existence to an act of Congress and have a mandate to serve the public. Therefore, they are not really "private" companies, but rather are "owned" by the citizens of the United States.
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How do Federal Reserve Banks differ from commercial banks?
Federal Reserve Banks are the fiscal agents for the U.S. Treasury, which means that they are the federal government's bank. The Reserve Banks offer many services to financial institutions, which makes them bankers' banks.
Who are the Federal Reserve Bank presidents?
Under the Federal Reserve Act, the president of a Federal Reserve Bank is the chief executive officer of the Bank. He or she is appointed by the Bank's board of directors, with the approval of the Board of Governors, for a term of five years.
The terms of the presidents of the twelve Reserve Banks run concurrently, ending on the last day of February in years ending with 1 and 6 (for example, 2001, 2006, and 2011). The appointment of a president who takes office after a term has begun ends with the end of that term. A Reserve Bank president may be reappointed after serving a full term or a partial term. Reserve Bank presidents are subject to mandatory retirement upon becoming 65 years of age. However, a president initially appointed after age 55 may, at the option of the Bank’s board of directors, serve until attaining ten years of service in the office or age 70, whichever comes first.
Current Reserve Bank presidents.
Are Federal Reserve Bank employees considered government employees?
No. Employees of the Federal Reserve Banks are not government employees. They are paid as part of the expenses of their employing Reserve Bank.
How many checks are processed by the Federal Reserve Banks?
Information on check processing and other Federal Reserve Bank activities is reported in the Board of Governor'Annual Report, Statistical Table 8, Operations in Principal Departments of the Federal Reserve Banks (117 KB PDF)
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