FRS structure and owners
The Federal Reserve System is a central bank and a regulator rolled into one. The FRS controls monetary policy and relationships between all participants in the financial system (commercial banks, investment, pension and insurance funds, exchange organizations, etc.), while simultaneously combining the functions of an auditor and a “punishing authority”. The peculiarity of the FRS is its status of a joint-stock legal entity, whose shares do not belong to the state, but to individuals. On the one hand, this allows the System to be partially independent of political pressure, on the other hand, it gives rise to the fact that the main financial center of the world is in the hands of private billionaires.
How the Federal Reserve System Works
The main contradiction of the FRS is that, as a representative of state interests, its owners are private individuals. The Board of Governors consists of 12 regional members of the system, whose competence is to control interest rates. Geographically, the Central Council is located in Washington and is appointed by the President of the United States.
Below in the hierarchy are 12 Federal Reserve Banks, whose shares are held by private banks. The executive body is analogous to the Federal Open Market Committee and the Federal Advisory Council. Each Federal Bank is governed by 9 members, which make up three groups with the following markings:
- A – representatives of the regional office itself.
- B – representatives not related to the banking segment.
- C – Representatives appointed by the Federal Reserve Board.
Information about who actually owns the Fed is relatively closed. According to the most objective data, about 65% of the shares are owned by private foreign citizens and structures. Although the names of the owners are not subject to disclosure, some sources indicate banking structures and their shareholders in Rome, London, Amsterdam, Berlin, Paris. The rest of the shares are distributed among several commercial banks, which, by coincidence, are owned by the Rockefeller and Morgan families. The Rothschilds are also mentioned among the shareholders.
Throughout the century, there have been repeated attempts to change the status of the Fed in order to increase the influence of the state. And some of them turned out to be successful. For example, there was initially a persistent stereotype that the Federal Reserve System was a private company. This is not entirely true. The primary shareholder of the FRS can only be a US bank (although the fact that the shareholders of this bank may be beneficiaries from other countries is silent). Monetary policy is controlled by government agencies, so the Fed cannot, at its discretion, run the printing press at any time.
In accordance with the regulations of the Securities Commission, all companies whose shares can be bought / sold on the exchange / OTC markets must submit data on shareholders. And this information is open. However, the information about the ultimate owners is classified.
Output… The Federal Reserve System is the central bank and supervisory regulator that manages the system of commercial banks and acts as an executive body in relations between participants in financial markets. Despite the fact that the Fed operates by its own rules and is owned by individuals, its activities are controlled by the Senate and the President. It is they who determine the policy of the direction of work for the FRS and, if necessary, can legislatively change the powers and responsibilities of the System.