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The Board of Governors of the Federal Reserve System (Seven members, including the chairman, appointed by the president of the United States and confirmed by the Senate) 3)The Federal Open Market Committee (FOMC).(Seven members of Board of Governors plus presidents of FRB of New York and four other FRBs)4)The Federal Advisory Council. (Twelve members (bankers), one from each district)5)Member commercial banks. ( Around 2,900 member commercial banks)Federal Reserve Banks
Each of the twelve Federal Reserve districts has one main Federal Reserve Bank, which may have branches in other cities in the district. The three largest Federal Reserve banks in terms of assets are those of New York, Chicago, and San Francisco combined they hold more than 50% of the assets(discount loans, securities, and other holdings) of the Federal Reserve System.The New York bank, with around one-quarter of the assets, is the most important of the Federal Reserve banks. Each of the Federal Reserve banks is a quasi-public (pan private, pan government) institution owned by the private commercial banks in the district that are members of the Federal Reserve System.These member banks have purchased stock in their district Federal Reserve Bank (a requirementof membership), and the dividends paid by that stock are limited by law to 6% annually. The member banks elect six directors for each district bank; three more are appointed by the Board of Governors. Together, these nine directors appoint the president of the bank (subject to the approval of the Board of Governors). The directors of a district bank are classified into three categories: A, B, and C. The three A directors (elected by the member banks) are professional bankers, and the three B directors (also elected by the member banks) are prominent leaders from industry, labor, agriculture, or the consumer sector. The three C directors, who are appointed by the Board of Governors to represent the public interest, are not allowed to be officers, employees, or stockholders of banks. This design for choosing directors was intended by the framers of the Federal Reserve Act to ensure that the directors of each Federal Reserve Bank would reflect all constituencies of the American public.Member BanksAll national banks are required to be members of the Federal Reserve System. Commercial banks chartered by the states are not required to be members, but they can choose to join.Board of Governors of the Federal Reserve SystemAt the head of the Federal Reserve System is the seven-member Board of Governors, headquartered in Washington, DC. Each governor is appointed by the president of the United States and confirmed by the Senate. To limit the president's control over The Fed and insulate theFed from other political pressures, the governors can serve one full nonrenewable fourteen-year term plus part of another term, with one governor's term expiring every other January.' The governors (many are professional economists) are required to come from different Federal Reserve districts to prevent the interests of one region of the country from being overrepresented.