Federal Reserve Bank Definition
Federal Bank is not a single bank that is run by a single person rather it is jointly implemented by the committees of various Bank of The United States. Since 1913 the Federal Bank was created by the Federal reserve Act that consists of twelve Federal Reserve Districts. The committee was responsible for implementing Budgetary Policy.
HOW MANY ARE FEDERAL RESERVE BANKS THERE?
These are the twelve Federal Banks that run Federal Reserve Bank:
- Federal Reserve Bank of Philadelphia
- Federal Reserve Bank of Dallas
- Federal Reserve Bank of San Francisco
- Federal Reserve Bank of Boston
- Federal Reserve Bank of St. Louis
- Federal Reserve Bank of New York
- Federal Reserve Bank of Kansas City
- Federal Reserve Bank of Cleveland
- Federal Reserve Bank of Richmond
- Federal Reserve Bank of Atlanta
- Federal Reserve Bank of Chicago
- Federal Reserve Bank of Minneapolis
Federal Open Market Committee:
Federal Open market is the branch of Federal Reserve Board that regulates the monetary/ budgetary policies. The Federal Open Market Committee is formed of the board of governors that has seven members, and five Reserve Bank presidents. Members of the committee are usually classified as hawks (who favour tighter monetary policies), doves (who are enthusiastic on stimulus).
The chairman of FOMC and chair of the board of governors is same. Currently, from July 2017 Janet Yellen is the Chair of Federal Reserve Board. The other three members of the Board are Stanley Fischer – hawk; Jerome Powell – moderate; and Lael Brainard – dove.
Who owns the Federal Reserve?
The Federal Reserve System is not “owned” by any person. The parts of the Federal Reserve System share some characteristics with the private-sector organization, the Federal Reserve is established for serving the public interest.
The Federal Reserve is an independent organization that is established by the Federal Reserve Act of 1913. The Congress wanted 12 regional banks to show America’s diverse regions. The central banking system has three important characteristics:
- A central governing board-the Federal Reserve Board of Governors
- A decentralized operating structure of 12 Federal Reserve Banks
- A blend of public and private characteristics.
ABA Routing Numbers:
The ABA routing number which is also known as Routing Transit Number was initiated and developed by the American Bankers Association (ABA) in the year 1910. The ABA number is used for the specific financial institution that is responsible for the payment of an instrument.
ABA Routing Number has developed to assigning participants in automated clearinghouses, online banking, electronic funds transfer.
Who is Eligible For ABA Routing Number?
An ABA routing number is issued to those candidates who have federal or State chartered financial institution and have the capacity to maintain an account at a Federal Reserve Bank.
How to Obtain Routing Number?
Since 1911 Accuity is serving the ABA’s Official Registrar. It is responsible for the assignment of routing numbers in accordance with the Routing Number Administrative Board Routing Number Policy.
In order to apply for a routing number, a financial institution must submit the following details are mandatory
- Complete Routing Number Application and Agreement.
- Preliminary, or final, charter approval from the chartering agency (State Banking Department, OCC, NCUA etc.)
- The application fee:
– $500 if applying for the institution’s first routing number
– $625 if applying for any additional routing number.