skip to main navigation skip to secondary navigation skip to content
Board of Governors of the Federal Reserve System
skip to content

Government Performance and Results Act Annual Performance Report


About This Annual Performance Report

The Government Performance and Results Act (GPRA) of 1993 requires that federal agencies, in consultation with the Congress and outside stakeholders, prepare a strategic plan covering a multiyear period and submit an annual performance plan and performance report. The GPRA Modernization Act of 2010 refines those requirements to include quarterly performance reporting. Although the Board of Governors of the Federal Reserve System (the Board) is not covered by GPRA, the Board voluntarily complies with the spirit of GPRA and, like federal agencies, prepares strategic and performance plans and performance reports.

Consistent with the requirements of GPRA, this Performance Report is based on earlier Board planning documents: the Government Performance and Results Act Strategic Planning Document, 2008-2011 and the Government Performance and Results Act Annual Performance Plan 2011.1

This report focuses on four areas: the Board's monetary policy function, its bank supervision and regulation function, its operations in overseeing Federal Reserve System (the System) activities, and its management activities. Although a discussion of the System and its structure is provided below to help explain the performance measures used by the Board, this performance report focuses solely on Board operations.

As required by GPRA, this report is issued independently of other Board documents submitted to the Congress. However, considering the report in conjunction with other Board documents gives a more detailed understanding of Board planning, budgeting, operations, and performance. As required by the Federal Reserve Act, the Board annually submits a report to the Congress describing in detail the operations of the System for the previous year. Since 1985, the Board has also provided the Congress with a supplement, the Annual Report: Budget Review, which describes in detail the plans and resources discussed in the approved budgets of the Board and the Reserve Banks. The most recent versions of these two documents were provided to the Congress in 2012.2

Back to section top

Overview of the Federal Reserve System

The System is the central bank of the United States, established by the Congress to provide the nation with safer, more flexible, and more stable monetary and financial systems.

Over the years, its role in banking and the economy has expanded, and today the Federal Reserve's duties fall into five general areas:

  1. conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of maximum employment and stable prices
  2. supervising and regulating financial institutions to ensure the safety and soundness of the nation's banking system, maintaining the stability of the financial system, and containing systemic risk that may arise in financial markets
  3. protecting the credit rights of consumers and encouraging banks to meet the credit needs of consumers, including those in low- and moderate-income neighborhoods
  4. playing a major role in operating the nation's payment systems
  5. providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions

The System was created by passage of the Federal Reserve Act (the act), which President Woodrow Wilson signed into law on December 23, 1913. The act stated that the System was created "to provide for the establishment of Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."

Soon after the creation of the Federal Reserve, it became clear that the act had broader implications for national economic and financial policy. As time has passed, further legislation has clarified and supplemented the System's original purposes. Key laws affecting the Federal Reserve include the Bank Holding Company Act of 1956 and its amendments; the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; the Federal Deposit Insurance Corporation Improvement Act of 1991; the Gramm-Leach-Bliley Act (GLBA) of 1999; and the Check Clearing for the 21st Century Act of 2004. In a 1977 amendment to the Federal Reserve Act, the Congress defined the primary objectives of national economic policy. These objectives include economic growth in line with the economy's potential to expand and to maintain a high level of employment; stable prices (that is, stability in the purchasing power of the dollar); and moderate long-term interest rates. Major financial services reform legislation, incorporated in the GLBA, reflects changes in the nature of the industry and in the economy generally. GLBA and the changes it ushered in for the U.S. financial services industry continue to affect significantly the operations and workload of the Federal Reserve.

Since the late 1960s, several federal laws were created that were designed to protect consumers when securing credit. The Congress has assigned to the Federal Reserve the duty of implementing the provisions of these laws to ensure that consumers receive comprehensive information and fair treatment from financial institutions when they engage in these transactions. Consumer protection laws such as the 1968 Truth in Lending Act, the Community Reinvestment Act of 1977 (CRA), the Expedited Funds Availability Act of 1987, the Truth in Savings Act of 1991, and the Fair and Accurate Credit Transactions Act of 2003 have given the Federal Reserve rulemaking, compliance, and consumer education responsibilities.

As a result of the recent financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), Pub. L. No. 111-203, H.R. 4173, was signed into law on July 21, 2010. The legislation

  • creates a council to identify and respond to emerging systemic risks before they threaten the stability of the economy;
  • gives the Federal Reserve important new authorities to safeguard financial stability, including the responsibility to provide consolidated supervision of systemically important financial institutions, as well as new authorities to help ensure the safety and soundness of financial market utilities;
  • increases the transparency of the Federal Reserve while maintaining its essential political independence;
  • provides for the orderly resolution of failing, systemically significant, nonbank financial firms;
  • brings greater transparency and accountability to the over-the-counter derivatives market; and
  • creates the independent Consumer Financial Protection Bureau (CFPB) within the Federal Reserve, charged with writing all consumer financial protection rules, as well as examining and enforcing such rules for banks and credit unions with assets in excess of $10 billion.3

System Role in the Government

The System is considered to be an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive branch of government. The System is, however, subject to oversight by the U.S. Congress. The Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government; therefore, the description of the System as "independent within the government" is more accurate.

Structure of the System

Congress designed the structure of the System to give it a broad perspective on the economy and on economic activity in all parts of the nation. It is a federal system, composed of a central, governmental agency--the Board of Governors--in Washington, D.C., and 12 regional Federal Reserve Banks. The Board and the Reserve Banks share responsibility for supervising and regulating certain financial institutions and activities, for providing banking services to depository institutions and the federal government, and for ensuring that consumers receive adequate information and fair treatment in their transactions with the banking system.

A major component of the System is the Federal Open Market Committee (FOMC), which is made up of the members of the Board of Governors, the president of the Federal Reserve Bank of New York, and presidents of four other Federal Reserve Banks who serve on a rotating basis. The FOMC oversees open market operations, which is the main tool used by the Federal Reserve to influence overall monetary and credit conditions.

Board of Governors

The Board is a federal government agency, composed of seven members who are appointed by the President of the United States and confirmed by the U.S. Senate. The full term of a Board member is 14 years, and the appointments are staggered so that one term expires on January 31 of each even-numbered year. After serving a full term, a Board member may not be reappointed. If a member leaves the Board before his or her term expires, however, the person appointed and confirmed to serve the remainder of the term may later be reappointed to a full term.

The Chairman and the Vice Chair of the Board are also appointed by the President and confirmed by the Senate. The nominees to these posts must already be members of the Board or must be simultaneously appointed to the Board. The terms for these positions are four years.

Back to section top


1. These documents are available on the Board's website, respectively, at and to text

2. Refer to the Board's 98th Annual Report, 2011 at and the Annual Report: Budget Review for 2012 at to text

3. Several provisions of the law took effect one year after its enactment: Specifically, on July 21, 2011, the Board assumed all supervisory and rulemaking authority for savings and loan holding companies. In addition, the Office of the Comptroller of the Currency assumed oversight of federal and state savings associations, the Federal Deposit Insurance Corporation (FDIC) assumed supervisory authority of state-chartered associations, and the CFPB replaced the Office of Thrift Supervision on the FDIC board of directors.  Return to text

Last update: July 10, 2012

Back to Top