Definition of board of governors

seven-member board, appointed by the President of the United States and confirmed by the Senate, governing the Federal Reserve System. Federal Reserve governors, who serve for 14-year terms, set reserve requirements for depository financial institutions; approve the discount rate for short-term Reserve Bank loans to financial institutions, as proposed by each of the 12 Federal Reserve Banks; regulate state chartered member banksand bank holding companies; and cast a majority of the votes on the influential Federal Open Market Committee (FOMC), through which the Federal Reserve directs monetary policy. The chairman of the Board of Governors, serving a four-year term, is the senior policy maker in the Federal Reserve System, and represents the Federal Reserve before Congress and federal agencies.