<P> The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: maximizing employment, stabilizing prices, and moderating long - term interest rates . The first two objectives are sometimes referred to as the Federal Reserve's dual mandate . Its duties have expanded over the years, and as of 2009 also include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions . The Fed conducts research into the economy and provides numerous publications, such as the Beige Book and the FRED database . </P> <P> The Federal Reserve System is composed of several layers . It is governed by the presidentially appointed Board of Governors or Federal Reserve Board (FRB). Twelve regional Federal Reserve Banks, located in cities throughout the nation, oversee the privately owned U.S. member banks . Nationally chartered commercial banks are required to hold stock in the Federal Reserve Bank of their region, which entitles them to elect some of their board members . The Federal Open Market Committee (FOMC) sets monetary policy; it consists of all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time: the president of the New York Fed and four others who rotate through one - year terms . There are also various advisory councils . Thus, the Federal Reserve System has both public and private components . The structure is considered unique among central banks . It is also unusual in that the United States Department of the Treasury, an entity outside of the central bank, prints the currency used . </P> <P> Although an instrument of the U.S. Government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms ." The federal government sets the salaries of the board's seven governors . The federal government receives all the system's annual profits, after a statutory dividend of 6% on member banks' capital investment is paid, and an account surplus is maintained . In 2015, the Federal Reserve made a profit of $100.2 billion and transferred $97.7 billion to the U.S. Treasury . </P> <P> The primary motivation for creating the Federal Reserve System was to address banking panics . Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes". Before the founding of the Federal Reserve System, the United States underwent several financial crises . A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913 . Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system . </P>

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