What Is the Federal Reserve System (FRS)?

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The Federal Reserve System (FRS) is the United States' central bank. It is perhaps the most powerful financial institution in the world, and is commonly referred to as the Fed. It was established to provide the country with a secure, adaptable, and stable financial and monetary system. The Fed is governed by a seven-member board of directors. There are additional 12 Federal Reserve banks, each with its own president who represents a different district.



Key TakeAways.

  • The Federal Reserve System is the central bank and monetary authority of the United States.
  • The Fed provides the country with a safe, flexible, and stable monetary and financial system.
  • The Federal Reserve System is composed of 12 regional Federal Reserve Banks that are each responsible for a specific geographic area of the U.S.1
  • The Fed's main duties include conducting national monetary policy, supervising and regulating banks, maintaining financial stability, and providing banking services.
  • The Federal Open Market Committee is the Fed's monetary policy-making body and manages the country's money supply.


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