| central bank | An agency of government that has public policy functions such as monitoring the operation of the financial system and controlling the growth of the money supply.
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| Federal Reserve System | The central bank of the United States, created by Congress to issue currency and coin, regulate the banking system, protect the value of the dollar, and promote maximum employment.
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| Board of Governors | The chief policymaking and administrative body of the Federal Reserve System, composed of seven persons appointed by the president of the United States and confirmed by the Senate for maximum 14-year terms.
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| Federal Open Market Committee (FOMC) | The chief body for setting money and credit policy within the Federal Reserve System, consisting of the seven members of the Federal Reserve Board and the presidents of the 12 Federal Reserve banks, only 5 of whom may vote.
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| Federal Reserve bank | One of 12 regional banks chartered by the U.S. Congress to provide central banking services to a specific region of the nation.
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| member banks | Banks that have joined the Federal Reserve System, consisting of all federally chartered (national) banks and any state-chartered U.S. banks that meet the Federal Reserve's requirements for membership.
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| transparency | Policy used by some central banks today to make their policy goals and actions clear enough so that the public can develop accurate forecasts of where central bank policy is headed for the future.
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| fiscal agent | A role of the Federal Reserve System in which it provides services to the federal government, such as clearing and collecting checks on behalf of the U.S. Treasury and conducting auctions for the sale of new Treasury securities.
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| monetary policy | The use of various tools by central banks to control the cost and availability of loanable funds in an effort to achieve national economic goals.
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| legal reserves | Deposits held at the Federal Reserve banks by depository institutions plus currency and coin held in the vaults of these institutions.
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| required reserves | Holdings of cash and funds on deposit with the Federal Reserve banks by depository institutions that are required by law to backstop the public's deposits held by these same institutions.
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| excess reserves | Cash and deposits at the Federal Reserve banks held by depository institutions that are in excess of their legal reserve requirements.
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| deposit multiplier | A number that indicates what volume of new deposits will result from an injection of a given amount of excess reserves into the banking system.
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| money multiplier | The ratio of the size of the money supply to the total reserve base available to depository institutions.
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| monetary base | The sum of legal reserves in the banking system plus the amount of currency and coin held by the public.
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