The Federal Reserve Bank of Philadelphia serves the Third Federal Reserve District, which consists of eastern Pennsylvania, southern New Jersey, and Delaware. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. As the nation’s central bank, the Federal Reserve System works to ensure the strength and integrity of the economy and financial system.
The Fed’s basic mission is to create the financial conditions that foster economic growth: stable prices, sound banking practices, and a reliable payments system. In pursuit of its mission, the Fed operates in four distinct but interconnected areas: conducting the nation’s monetary policy; supervising and regulating financial institutions; performing services for the U.S. Treasury; and supporting an effective and efficient payments system.
Congress created the Federal Reserve in 1913 and designed its decentralized structure of 12 individual Reserve Banks, overseen by a seven-member Board of Governors in Washington, D.C. The Fed’s unique public/private structure operates independently within government but not independent of it. The Board of Governors, appointed by the President of the United States and confirmed by the Senate, represents the public sector, or government side, of the Fed. The Reserve Banks and the local citizens who serve on their boards of directors represent the private sector. This structure imposes accountability while avoiding centralized governmental control of banking and monetary policy.
To further protect its independence, the Federal Reserve receives no government appropriations from Congress. The Fed finances its activities mainly with the interest earned from the government securities it has acquired to implement monetary policy. Other sources of income include revenue received from providing services to financial institutions, interest on loans to depository institutions, and interest on foreign currency investments. Any earnings the Fed makes above the cost of operations are turned over to the U.S. Treasury.