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Introduction to the Federal Reserve Banks

Visit a Federal Reserve Bank, and you'll see that its operations resemble the activities in private businesses.

The structure of the Federal Reserve is complex, yet effective. Reserve Banks operate somewhat independently but under the general oversight of the Board of Governors. These Reserve Banks, and their branches, are strategically located in large cities across the country. The economists and other employees in each of the 12 Federal Reserve districts work together to provide a regional perspective and expert knowledge about their local economies. Reserve Bank activities serve primarily three audiences — bankers, the U.S. Treasury and the public.

  • Federal Reserve Banks are often called the "bankers' banks" because they provide services to commercial banks similar to the services that commercial banks provide for their customers. Federal Reserve Banks distribute currency and coin to banks, lend money to banks and process electronic payments. At one point, workers' paychecks and the checks written to pay mortgages and most other bills were sent to one of the 12 Reserve Banks, where the checks were processed to settle the debt. However, now all check processing done by the Federal Reserve is handled by the Federal Reserve Bank of Atlanta.


Why do you think only one Reserve Bank currently clears checks?

A. Because there was a significant decline in the use of paper checks and an increase in electronic imaging and online bill paying.

B. Because most checks are written by people in the Atlanta Bank's district.


  • Reserve Banks also serve as fiscal agents for the U.S. government. They maintain accounts for the U.S. Treasury, process government checks and conduct government securities auctions.
  • Finally, Reserve Banks conduct research on the regional, national and international economies, prepare Reserve Bank presidents for their participation on the Federal Open Market Committee (FOMC) and distribute information about the economy through publications, speeches, educational workshops and websites. For example, the Beige Book is published eight times per year and includes information regarding the economic conditions for all 12 Federal Reserve districts.