FEDERAL RESERVE SYSTEM Definition

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FEDERAL RESERVE SYSTEM (The Fed) is the central bank of the United States created by Congress, consisting of a seven-member Board of Governors in Washington, D.C., 12 regional Federal Reserve Banks and depository institutions that are subject to reserve requirements. All national banks are members; state-chartered banks may elect to become members and state members are supervised by the Board of Governors and the Reserve Banks. Reserve requirements established by the Fed apply to nonmember depository institutions as well as member banks. Both classes of institutions share equal access to Federal Reserve discount borrowing privileges and Federal Reserve services.

Learn new Accounting Terms

INTEREST, in law, is a right or legal share of something or a financial involvement with something; in finance, it is a fixed charge for borrowing money; usually a percentage of the amount borrowed.

ACCOUNTS RECEIVABLE TURNOVER is the ratio of net credit sales to average accounts receivable, which is a measure of how quickly customers pay their bills.

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