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Finance Glossary

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Over 700 finance terms, Shmooped to perfection.

Federal Reserve Board


The Federal Reserve board is the seven people who basically govern the entire Federal Reserve System.

Want a seat on the board? You need to get elected by the President of the U.S. and approved by the Senate. Once you do get to the board, though, you wield a lot of power. The board makes big economic decisions that affect us all. For example, they decide how much banks need to keep in reserve (that's the amount banks need to keep in cash at the federal bank to make sure they don't run out). They also decide the interest rate the Federal Reserve charges when loaning money to banks.

These kinds of decisions affect the interest rates you pay and how well the economy overall is doing. 

P.S. It was created with three mandates: control inflation, enable full employment, and promote stability within the banking system.