Who Owns The Federal Reserve?
Who owns the Federal Reserve? This is a question that is being asked each day as America is bombarded with news regarding the housing slowdown, the mortgage fiasco and the meltdown in the economy. Investors are hoping that the Federal Reserve will perform some type of magic trick and solve the nation's problems.
The Federal Reserve has been around since 1913, when it was established by Congress and signed into law as the Federal Reserve Act by President Woodrow Wilson. Congress thought the Federal Reserve could provide the nation with a monetary and financial system which would act as the central bank for the United States. The President of the United States chooses a seven member Board of Govenors who are housed in Washington D.C and confirmed by senate for a fourteen-year term. As of 2011, Ben Bernanke is the Chairman of the Federal Reserve.
The seven members of the Board of Govenors also sit on the Federal Open Market Committee, which has twelve members. This is the infamous committee that has control of the nation's short-term interest rates and money supply in order to provide stable prices and full employment. The Federal Reserve is also responsible for maintaining the safety and soundness of the nation's financial institutions. The other five members of this committee rotate between the heads of the twelve Federal Reserve Banks. In order to be part of the Federal Reserve system the twelve reserve banks must issue stock to the member banks or they are not allowed to be part of the Federal Reserve. The seven members of the Board of Govenors have the majority ruling when it comes time for voting, but no individual person or corporation actually owns the Federal Reserve.