Legal Dictionary of Pakistan

Federal Reserve System

A network of 12 central banks supervised by the Board of Governors, who are appointed by the President and confirmed by the Senate and who set the reserve requirements for the member banks, review the discount-rate actions of the regional Federal Reserve banks, and set ceilings on the interest rates that member banks may pay. -Abbr. Fed. "The Federal Reserve System of 1913 evolved out of a search for consensus among bankers, politicians,- and some academic experts. It was a move toward 'central bank' regulation in the European sense . . . . [The System] seemed to resolve the outstanding problems in money and banking. Federal Reserve banknotes could grow with expanding commercial paper and economic prosperity, and assure a more adequate, reliable monetary growth." William A. Lovett, Banking and Financial Institutions Law in a Nutshell 14-15 (1997).