Business and Personal Finance Dictionary

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• FEDERAL RESERVE
  
  Established in 1913 to stabilize the country's financial system, the Federal Reserve System-known as the Fed-is the central bank of the US. The seven-member Federal Reserve Board oversees the banking system and sets national monetary policy, with the goal of keeping the US economy healthy and its currency stable. Like the other members of the Board, the chairman is appointed by the president of the United States, and has emerged as one of the primary shapers of the American economy and economies throughout the world. The Federal Reserve System includes 12 regional Federal Reserve banks, 25 Federal Reserve branch banks, all national banks, and some state banks. Member banks must meet the Fed's financial standards. The Fed's Open Market Committee sets interest rates and establishes credit policies, and the New York Federal Reserve Bank puts those policies into action by buying and selling government securities.
  
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