Introduction to Finance

Figure 4.2
.
Directors and Off icers 
Each Reserve Bank has corporate offi
cers and a board of 
directors. The selection of offi
cers and directors is unlike that of other corporations. Each 
Reserve Bank has on its board nine directors, who must be residents of the district in which 
they serve. The directors serve terms of three years, with appointments staggered so that three 
directors are appointed each year. To ensure that the various economic elements of the Federal 
Reserve districts are represented, the nine members of the board of directors are divided into 
three groups: 
Class A
, 
Class B
, and 
Class C
.
FL
NM
DE
MD
TX
OK
KS
NE
SD
ND
MT
WY
CO
UT
ID
AZ
NV
WA
CA
OR
KY
ME
NY
PA
MI
VT
NH
MA
RI
CT
VA
WV
OH
IN
IL
NC
TN
SC
AL
MS
AR
LA
MO
IA
MN
WI
NJ
GA
DC
Buffalo
New York
Boston
Cleveland
Detroit
Chicago
Charlotte
Atlanta
Birmingham
Jacksonville
Miami
New
Orleans
San
Antonio
Dallas
Little
Rock
Houston
St.
Louis
Omaha
Minneapolis
Kansas
City
Seattle
Portland
Los
Angeles
Salt
Lake City
Denver
Helena
Richmond
San
Francisco
Philadelphia
Pittsburgh
El Paso
Baltimore
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
̝
HI
AK
Board of Governors of the Federal Reserve System
Federal Reserve Bank cities
Federal Reserve Branch cities
̝
Louisville
Memphis
Nashville
Cincinnati
̝
̝
̝
̝
̝
FIGURE 4.2
The Federal Reserve System
Source:
Board of Governors of the Federal Reserve System.

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4.3 Structure of the Federal Reserve System
83
Both Class A and Class B directors are elected by the member banks of the Federal 
Reserve district. The Class A directors represent member banks of the district, and the Class 
B directors represent nonbanking interests. These nonbanking interests are commerce, agri-
culture, and industry. The Class C directors are appointed by the Board of Governors of the 
Federal Reserve System. These persons may not be stockholders, directors, or employees of 
existing banks.
The majority of the directors of the Reserve Banks are elected by the member banks of 
each district. However, the three nonbanking members of each board appointed by the Board 
of Governors of the Federal Reserve System are in a more strategic position than the other 
board members. One member appointed by the Board of Governors is designated chairperson 
of the board of directors and Federal Reserve agent, and a second member is appointed deputy 
chairperson. The Federal Reserve agent is the Board of Governor’s representative at each 
Reserve Bank. He or she is responsible for maintaining the collateral that backs the Federal 
Reserve notes issued by each Reserve Bank.
Each Reserve Bank also has a president and fi rst vice president, who are appointed 
by its board of directors and approved by the Board of Governors. A Reserve Bank may 
have several additional vice presidents. The president is responsible for executing policies 
established by the board of directors and for the general administration of Reserve Bank 
aff airs. All other offi
cers and personnel of the Reserve Bank are subject to the authority of 
the president.