What Is the Federal Reserve Bank of Minneapolis?
The Federal Reserve Bank of Minneapolis is one of 12 regional banks in the Federal Reserve System (FRS). The bank is responsible for the Ninth Federal Reserve District with a territory that includes Montana, North Dakota, South Dakota, its home state of Minnesota, and parts of Wisconsin and Michigan.
- The Federal Reserve Bank of Minneapolis is one of 12 regional banks in the Federal Reserve System.
- The Minneapolis Fed serves the Ninth Federal Reserve District, which covers the states of Minnesota, Montana, North Dakota, and South Dakota; the Upper Peninsula of Michigan; and 26 counties in northern Wisconsin.
- Headquartered in Minneapolis, a branch office is located in Helena, Montana.
Understanding the Federal Reserve Bank of Minneapolis
The Federal Reserve Bank of Minneapolis is responsible for regulating the banks within its territory. Like all the reserve banks, it also has a role in recording and reviewing price inflation and economic growth in its region.
In addition, as outlined on the Federal Reserve website, it supports the U.S. central bank’s mission to maintain the stability of the financial system, foster the safety and efficiency of the payment and settlement system, and promote consumer protection and community development.
Like the 11 other reserve banks, the Federal Reserve Bank of Minneapolis provides cash to banks within its district and monitors electronic deposits. The president of the Federal Reserve Bank of Minneapolis rotates among bank presidents who, along with the seven governors of the Federal Reserve Board, meet to set open market operations. This is referred to as the Federal Open Market Committee (FOMC).
As with all reserve banks, the Federal Reserve Bank of Minneapolis has a nine-member board of directors, six of whom are elected by member banks in the district. The remaining three are appointed by the Federal Reserve Board of Governors.
Characteristics and Organization
The Federal Reserve Bank of Minneapolis is the third-largest reserve bank in terms of the territory it controls, behind the Federal Reserve Bank of San Francisco and the Federal Reserve Bank of Kansas City.
Banknotes printed by the Federal Reserve Bank of Minneapolis are denoted by the mark "I9," representing the ninth district. ("I" is the ninth letter of the alphabet).
The Federal Reserve Bank of Minneapolis has been led by Bank President and CEO Neel Kashkari since 2016. Like other Fed bank presidents, Kashkari publicly shares his policy views in the media and through the publication of bylined articles.
Over the years, the views of bank presidents and the research done by each bank have shaped their reputations within the Federal Reserve System. Kashkari, for example, has dissented from the FOMC’s decisions to raise interest rates several times since taking office and frequently communicates his views via Twitter.
Every Fed bank has its own research staff that is responsible for conducting and publishing academic-level economic research related to Fed policy.
Each bank also has a staff that tracks economic activity in their district, compiled in a publication known as the Beige Book which is published eight times per year.
What Do Federal Reserve Regional Banks Do for the Regions?
The Federal Reserve regional banks do not directly serve the public. They serve and regulate the banks of their regions.
The regional banks are the depositories of bank reserves for the regions they serve. (Every bank is legally required to keep minimum reserves either in its own vaults or in a Reserve bank.)
The regional banks have many routine tasks such as clearing payments, issuing currency, and conducting local auctions of federal debt instruments.
They also collect data on local conditions that contribute to the Federal Reserve's tracking of the national economy.
Why Was a Regional Federal Reserve System Created?
Most nations have a central bank, but the U.S. Federal Reserve system is a rare example of a regionalized central bank operation.
Its regionalization reflects the diversity of economies within the United States and the challenge of creating economic policies that address the whole.
The Federal Reserve Bank of Minneapolis is one of 12 regional banks created in 1914, on the eve of World War I. The regional banks expanded rapidly in the following years due primarily to their role in issuing war bonds. The Minneapolis branch was particularly active during those years because the war greatly boosted the prosperity of American farms.
Where Are the 12 Federal Reserve Banks?
In addition to Minneapolis, Federal Reserve Banks are headquartered in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Kansas City, Dallas, and San Francisco. The main offices of the Federal Reserve are in Washington, D.C.
The Bottom Line
The regional Federal Reserve banks such as the one based in Minneapolis focus on economic issues of local interest.
Although citizens can't drop by any of the Federal Reserve Banks to open a checking account, they do have services of interest to the communities they serve. Of particular note is the Federal Reserve of Minneapolis website's tracking of economic data for the region as well as the U.S. as a whole. Its charts cover employment and jobs data as well as regional economic activity.