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Board of Governors of the Federal Reserve System
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Purposes and Functions

The 10th edition of The Federal Reserve System Purposes & Functions details the structure, responsibilities, and aims of the U.S. central banking system. The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy and, more generally, to serve the public interest. It includes three key entities: the Board of Governors, 12 Federal Reserve Banks, and the Federal Open Market Committee.

1. Overview of the Federal Reserve System

Chapter 1. Overview of the Federal Reserve System

The Federal Reserve performs five key functions in the public interest to promote the health of the U.S. economy and the stability of the U.S. financial system.

2. The Three Key System Entities

Chapter 2. The Three Key System Entities

The Board of Governors, the Federal Reserve Banks, and the Federal Open Market Committee work together to promote the health of the U.S. economy and the stability of the U.S. financial system.

3. Conducting Monetary Policy

Chapter  3. Conducting Monetary Policy

The Federal Open Market Committee sets U.S. monetary policy in accordance with its mandate from Congress: to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy.

4. Promoting Financial System Stability

Chapter 4. Promoting Financial Stability

The Federal Reserve monitors financial system risks and engages at home and abroad to help ensure the system supports a healthy economy for U.S. households, communities, and businesses.

5. Supervising and Regulating Financial Institutions and Activities

Chapter 5. Supervising and Regulating Financial Institutions and Activities

The Federal Reserve promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole.

6. Fostering Payment and Settlement System Safety and Efficiency

Chapter 6. Fostering Payment and Settlement System Safety and Efficiency

The Federal Reserve works to promote a safe, efficient, and accessible system for U.S. dollar transactions.

7. Promoting Consumer Protection and Community Development

Chapter 7. Promoting Consumer Protection and Community Development

The Federal Reserve advances supervision, community reinvestment, and research to increase understanding of the impacts of financial services policies and practices on consumers and communities.

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Last update: November 1, 2016