The Structure of the Fed

The Federal Reserve System is an odd beast: a public/private mix "deliberately set apart from elected government, yet part of it," as author William Greider wrote in Secrets of the Temple.

Inside this peculiar structure, blessed and overseen by the government, private banks wield great leverage and enjoy a remarkable degree of special access.

The Fed is directed by a seven-member Board of Governors. The Governors (including the Chairman) are appointed by the President and confirmed by the Senate.

The Federal Reserve System is divided into 12 regional Federal Reserve Districts, each headed by a nine-member Board of Directors. Two-thirds of the directors are elected by the 3,296 private commercial banks (the "Member Banks") belonging to the Federal Reserve System. The remainder are appointed by the Board of Governors. Each district board elects its own Reserve Bank President, subject to the approval of the Board of Governors. 

The powerful Federal Open Market Committee consists of 12 people: the seven Governors and five of the 12 district presidents, who serve on a rotating basis.

The influential Federal Advisory Committee (which meets four times a year, in private, to advise the BOG) is elected by the 12 Reserve Bank Boards. District directors also meet 24 times a year and (among other business) vote to urge the Board of Governors to raise, lower or maintain interest rates.