Federal Reserve Board (FRB)
What it is:
The Federal Reserve Board (FRB), officially called the Federal Reserve Board of Governors, is the Federal Reserve System's primary decision-making body.
How it works (Example):
There are seven members on the FRB, each appointed to a 14-year term by the President of the United States with the advice and consent of the Senate. The President designates the chairman and the vice-chairman of the Board. Ben Bernanke is the current chairman of the FRB.
Three committees advise the FRB: the Federal Advisory Council, the Consumer Advisory Council, and the Thrift Institutions Advisory Council.
The FRB is part of the Federal Open Market Committee (FOMC), along with the president of the New York District Federal Reserve Bank and four other Federal Reserve District bank presidents. The FRB chair is also the chair of the FOMC.
The FRB also appoints three of the nine directors at each of the Federal Reserve's 12 reserve banks. Either the FRB or the local reserve banks appoint the directors of the Federal Reserve's 25 branch banks.
Why it Matters:
The FRB has substantial influence on the financial markets because its decisions and actions are at the center of U.S. monetary policy. The FRB sets reserve requirements for banks and regulates their asset holdings. It also approves changes in the discount rate, which is the interest rate the Fed charges member banks as "lender of last resort