Fed 101: Reserve Banks and the roles of the Fed
The Federal Reserve Bank of Dallas is part of the Federal Reserve System, the central bank of the United States. We’re one of 12 regional Reserve Banks that work together to ensure the Federal Reserve stays closely connected to communities all across the country.
Reserve Banks play a vital part in carrying out the Fed’s responsibilities to keep the U.S. economy strong—by ensuring stable prices, safe banking, secure payments and economic opportunity for all.
Explore the basics of our work below.
For a deeper dive, visit The Fed Explained (includes interactive and publication).
Each Reserve Bank operates within its own geographic area, or district. See a map of all Federal Reserve districts.
The Dallas Fed serves the Eleventh Federal Reserve District—Texas, northern Louisiana and southern New Mexico. It has branches in El Paso, Houston and San Antonio. See a list of counties in the Eleventh District.
Reserve Banks have five primary roles to fulfill in support of the Fed’s mission:
- Conduct economic research.
- Examine financial institutions.
- Enforce compliance with federal consumer and fair lending laws while promoting local community development.
- Monitor the overall stability of the financial system.
- Support safe, efficient and accessible payment systems.
The daily work we do to deliver on these responsibilities ranges from gathering information from local business owners to providing currency to our region’s banks. Our close connections to district communities are essential.
Economic research involves not just data, but people.
Through ongoing engagement with people who live and work in their district, Reserve Bank presidents, economists and other officials and staff listen to the region they serve. They gather perspectives from business and community leaders, bankers and financial professionals to better understand local economic and financial conditions.
Each Reserve Bank president brings these distinct perspectives from their region to the Federal Reserve Board during Federal Open Market Committee meetings. Through this process, the varied economic experiences of people all across the country are represented in the formation of U.S. monetary policy.
Learn more: Meet our Dallas Fed president
Each Reserve Bank delivers a wide range of services to its district. Here are some important examples:
- Supplying U.S. currency and coin to banks in the district.
- Gathering and analyzing regional economic data for use in national decisions on monetary policy, as well as by local businesses and consumers.
- Helping banks manage liquidity by providing lending facilities where banks can borrow funds.
- Working with banks to help ensure they operate in a safe and sound manner, comply with federal laws and meet the credit needs of local residents and businesses.
- Supporting financial services for banks that facilitate the flow of payments in the district.
Being based in the region they serve allows Reserve Banks to respond more effectively to local needs. This can be especially important in times of stress—such as during a natural disaster or pandemic.
The Federal Reserve System was established by an act of Congress in 1913 to promote the effective operation of the U.S. economy.
By design, the Fed is structured as a decentralized and nonpartisan central bank with a combination of public and private characteristics. This structure allows us to take a long-term view of monetary policy across the entire country to make decisions that will promote a strong economy over time.
The Federal Reserve System includes a central governing board and a decentralized operating structure of reserve banks.
- The Federal Reserve Board of Governors is an independent federal agency in Washington, D.C.
- Twelve Federal Reserve Banks are located in major cities across the U.S.
Reserve Banks are supervised by the Federal Reserve Board but operate independently in many respects.
Having a federated structure keeps the Fed responsive to local concerns. And it ensures we consider multiple perspectives when analyzing issues and challenges involving the nation’s economy and financial system.
Under the Federal Reserve Act, each Reserve Bank is separately incorporated and has a nine-member board of directors.
Commercial banks that are members of the Federal Reserve System hold stock in their district’s Reserve Bank. These member banks elect six of the Reserve Bank’s directors—three to represent member banks and three to represent the public.
The remaining three directors are appointed by the Federal Reserve Board to represent the public.
Learn more: Meet our Dallas Fed directors
Federal Reserve Bank presidents and Federal Reserve Board governors work together as members of the Federal Open Market Committee (FOMC). The FOMC has responsibility for the Fed’s monetary policy function.
The FOMC meets eight times a year. FOMC members discuss economic conditions, deliberate the course of action, and vote on decisions about monetary policy.
All Reserve Bank presidents participate in every FOMC meeting to share economic perspectives and information from their district.
Five Reserve Bank presidents serve as voting members at a given time—the New York Fed president along with four others on a rotating basis. All seven Federal Reserve Board governors are permanent voting members of the FOMC.
As the U.S. central bank, the Federal Reserve works in the public interest. Its mission is to promote a strong financial system and a healthy economy.
The Fed’s responsibilities focus on fostering the stability, integrity and efficiency of our country’s monetary, financial and payment systems.
In accordance with laws passed by Congress, the Federal Reserve performs five key functions:
- Monetary policy: Setting U.S. monetary policy to promote maximum employment and stable prices.
- Financial stability: Monitoring financial system risks to help ensure the system supports a healthy economy for U.S. households, communities and businesses.
- Bank supervision and regulation: Promoting the safety and soundness of individual financial institutions and monitoring their impact on the financial system as a whole.
- Payment systems: Fostering a safe, efficient and accessible payment and settlement system for U.S. dollar transactions through services to the banking industry and the U.S. government.
- Consumers and communities: Promoting consumer protection and community development through bank supervision and research to understand the impacts of financial services policies and practices.
To help support these responsibilities, the Federal Reserve Board and Federal Reserve Banks conduct extensive economic research, as well as research on the financial industry and related areas.
The Federal Reserve is accountable to the American people through comprehensive audits and reviews, as well as regular reports to Congress.
We are committed to openness and transparency in our operations. Minutes of the Federal Open Market Committee are released after each meeting, and Fed officials speak frequently to the public and media.