Who Owns The Federal Reserve?

I recently wanted to see who owned the Federal Reserve, so I emailed them: "I was wondering who owned the Federal Reserve. If you would be able to provide me with companies and/or people who own it that would be much appreciated. Thanks, Quinton"

by Truth Control on February 18th, 2008

Their response:

Dear Mr. Figueroa:

Thank you for your recent inquiry concerning the ownership of the Federal Reserve.

The Federal Reserve System is not owned by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

For more in-depth information about the role and responsibilities of the Federal Reserve, I invite you to read the agency's publication entitled "The Federal Reserve System: Purposes and Functions," available online at
http://www.federalreserve.gov/pf/pf.htm.

I hope this information is helpful.

Sincerely,

JPD
Board Staff

As one would expect, a typical general / non-helpful response. I guess I'm going to have to dig deeper myself.

 Filed under: Banking / Economics, Federal Reserve System

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