The Fed and Monetary Policy- a 4 th branch?

1. The Fed and Monetary Policy- a 4th branch? In 1913 – A new organization was created to aid on Economic matters. The Federal Reserve became our Central Banking system The Federal Reserve is independent from our government but it is extremely important in understand money and our economy This extremely important body was not created by our Constitution and no member on the board is elected by the people Later creation of Federal Reserve which is in charge of monetary policy. They determine to the supply of in circulation and they increase or decrease interests rates on federal loans. It also regulates banks, provides financial services, and stabilizes our banking system The Federal Reserve- NOT CREATED BY CONSTUTION CONVENTION!!! And we don’t vote on one member. Yet our lives and economy might be impacted more by the “Fed” then any other branch. What Delegate would love this?

2. The Federal Reserve- NOT CREATED BY CONSTUTION As stipulated by the Banking Act of 1935, the President appoints the seven members of the Board of Governors of the Federal Reserve System They must then be confirmed by the Senate and serve for 14 years. Once appointed, Governors may not be removed from office for their policy views. The chairman and vice-chairman are chosen by the President from among the sitting Governors for four-year terms; these appointments are also subject to Senate confirmation. In practice the chairman is often re-appointed, but cannot serve longer than one 14-year term as governor (or, if appointed to fill a position whose previous occupant had not served out their term, then 14 years plus the time remaining in the previous unexpired term). By law, the chairman reports twice a year to Congress on the Federal Reserve's monetary objectives. He or she also testifies before Congress on numerous other issues and meets periodically with the Secretary of the Treasury.

3. The Federal Reserve- NOT CREATED BY CONSTUTION Fed Chairman Federal Reserve Board (7 members) Federal open market committee (FOMC) 12 Regional Federal Banks Privately owned U.S. banks and advisory councils The FOMC is the committee responsible for setting monetary policy and consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time. The Federal Reserve System has both private and public components, and was designed to serve the interests of both the general public and private bankers. The result is a structure that is considered unique among central banks. It is also unusual in that an entity outside of the central bank, namely the United States Department of the Treasury, creates the currency used

4. The Federal Reserve- NOT CREATED BY CONSTUTION According to the Board of Governors, the Federal Reserve is independent within government in that "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government." However, its authority is derived from the U.S. Congress and is subject to congressional oversight. Additionally, the members of the Board of Governors, including its chairman and vice-chairman, are chosen by the President and confirmed by Congress. The government also exercises some control over the Federal Reserve by appointing and setting the salaries of the system's highest-level employees. Thus the Federal Reserve has both private and public aspects. The U.S. Government receives all of the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained. In 2010, the Federal Reserve made a profit of $82 billion and transferred $79 billion to the U.S. Treasury.