Business and Personal Finance Dictionary

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• FEDERAL RESERVE SYSTEM
  
  The central banking system for the United States, known as the "Fed," was established by the Federal Reserve Act of 1913 and serves as the nation's central bank, issuing the nation's currency, conducting monetary policy through the regulation of the money supply and the cost of credit, facilitating the clearing of checks, providing short-term credit to member banks through the discount rate, regulating bank operations, approving interstate bank mergers, supervising bank holding companies, and providing oversight to international banking operations. It includes a seven-member Federal Reserve Board of Governors, 12 Federal Reserve Districts each with a Federal Reserve Bank (and 24 branch offices), the decision-making Federal Open Market Committee (FOMC), and the Federal Advisory Council consisting of an elected member from each Federal Reserve District that makes recommendations to the Board of Governors on business and financial matters.
  
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