<P> Confidence in the soundness of the banking and financial systems is what mobilizes a society's savings, allows the savings to be channeled into productive investments, and encourages economic growth . </P> <P> Each Federal Reserve Bank funds its own operations, primarily from interest on its loans and on the securities it holds . Expenses and dividends paid are typically a small fraction of a Federal Reserve Bank's revenue each year . By law the remainder must be transferred to the Board of Governors, which then deposits the full amount to the Treasury as interest on outstanding Federal Reserve Notes . </P> <P> The Federal Reserve Banks conduct ongoing internal audits of their operations to ensure that their accounts are accurate and comply with the Federal Reserve System's accounting principles . The banks are also subject to two types of external auditing . Since 1978 the Government Accountability Office (GAO) has conducted regular audits of the banks' operations . The GAO audits are reported to the public, but they may not review a bank's monetary policy decisions or disclose them to the public . Since 1999 each bank has also been required to submit to an annual audit by an external accounting firm, which produces a confidential report to the bank and a summary statement for the bank's annual report . Some members of Congress continue to advocate a more public and intrusive GAO audit of the Federal Reserve System, but Federal Reserve representatives support the existing restrictions to prevent political influence over long - range economic decisions . </P> <P> The Federal Reserve officially identifies Districts by number and Reserve Bank city . </P>

What are the 12 banks of the federal reserve