Board of Governors

DEFINITION of 'Board of Governors'

A board of governors is a several-member group that oversees or manages the running of an institution. The U.S. Postal Service, the BBC, the World Bank, and numerous colleges and universities all have boards of governors.

In the financial world, the best known board of governors is that of the Federal Reserve. It is a federal government agency with seven members, appointed by the president and confirmed by the senate, along with 1,800 in staff.

BREAKING DOWN 'Board of Governors'

The Federal Reserve board analyzes domestic and international economic developments, supervises and regulates the operations of the Federal Reserve Banks, has responsibility for Americas payments system, and oversees and administers most consumer credit protection laws. The board of governors has seven of the 12 seats on the Federal Open Market Committee, which determines U.S. monetary policy. The board alone has authority over changes in reserve requirements, and it must approve any change in the discount rate initiated by a Federal Reserve Bank.

Members of the board frequently testify before congressional committees on the economy, monetary policy, banking supervision and regulation, consumer credit protection, and financial markets.

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RELATED FAQS
  1. Who controls the Federal Reserve Bank?

    Read about the ownership and control of the Federal Reserve, the most powerful financial institution in the world and the ... Read Answer >>
  2. Who determines the reserve ratio?

    Understand what the Federal Reserve is and what it regulates in the U.S. economy. Learn about the reserve ratio and how the ... Read Answer >>
  3. Why would the Federal Reserve change the reserve ratio?

    Understand the Federal Reserve's monetary policy and the tools it uses to change that monetary policy. Learn about the reserve ... Read Answer >>
  4. What happens if the Federal Reserve lowers the reserve ratio?

    Learn about the Federal Reserve's monetary policy and the tools it uses to control it. Understand what happens if the Federal ... Read Answer >>
  5. How does the Federal Reserve's set discount rate affect my personal finances?

    Discover how the Federal Reserve implements its chosen monetary policy through its discount rates, and how these actions ... Read Answer >>
  6. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
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