Business Glossary

system established by the Federal Reserve Act of 1913 to regulate the U.S. monetary and banking system. The Federal Reserve System comprises 12 regional Federal Reserve Banks, their 25 branches, and all national and state banks that are part of the system. National banks are stockholders of the federal reserve bank in their region. The Federal Reserve System's main functions are to regulate the national money supply, set reserve requirements for member banks, supervise the printing of currency at the mint, act as clearinghouse for the transfer of funds throughout the banking system, and examine member banks to make sure they meet various Federal Reserve System regulations.