Talk:Federal Reserve

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Frequently asked questions

Q1: Is the Federal Reserve private or public/governmental?

A1: The Federal Reserve is not one entity but several, and each has its own status in relation to the government. The Board of Governors, which supervises the system, is a federal government agency. The twelve Federal Reserve Banks are privately owned corporations organized under the Federal Reserve Act that have public responsibilities. They are not organized under the laws that govern other private corporations, such as for-profit businesses.

Q2: Who owns the Federal Reserve?

A2: There are multiple answers depending on which part of the Federal Reserve is meant.

The Board of Governors is a government agency that uses government-owned facilities.
Each Federal Reserve Bank is owned by the member banks in its region. That ownership entitles them to receive limited dividends and to vote for some of its directors.
The government receives the Federal Reserve Banks' excess earnings (profit).

Q3: Does the court case Lewis v. United States (1982) prove that the Fed is a private bank?

A3: Lewis v. United States held that a man injured by a Federal Reserve Bank's vehicle could not sue the federal government for damages. The court decided that for the purpose of a tort claim, the Reserve Bank was not a federal agency, because the government did not control its detailed activities and day-to-day operations. The decision noted that in other cases, for other legal purposes, courts have treated Reserve Banks as government-affiliated entities.

Q4: Why is the structure of the Federal Reserve so complicated?

A4: The structure reflects the development of the Federal Reserve over time from a regional system into a de facto centralized system. The original Federal Reserve Act provided for banks to cooperate with each other and the government on a regional basis to meet credit demands. This was intended to prevent banks in more commercial parts of the country from dominating others. Each Federal Reserve Bank managed credit within its region, while the Board carried out regulatory and policy functions. (House Report 69 (1913), pp. 17–19). The Banking Act of 1935 increased the authority of the Board and the status of the Reserve Bank of New York, while reducing the role of the other Reserve Banks.

Q5: Does the Federal Reserve have a connection with federal income tax?

A5: Yes. The Federal Reserve Act and the first "modern" income tax were both enacted in late 1913 by Woodrow Wilson, who saw them as ways to strengthen the federal government against the large business interests of the time. Although they were enacted around the same time, each proposal had its own separate political history. Additionally, the Federal Reserve processes payments for the federal government. Therefore, any payment to the US Treasury (including income tax) is eventually deposited to the Treasury's account at the Federal Reserve Bank of New York and becomes part of the government's operating cash.

Q6: Does the Federal Reserve have a connection with the national debt?

A6: Yes. The Federal Reserve Banks are significant owners of federal debt securities, about $5.6 trillion or 18% of the debt as of June 2022. They draw part of their income from these holdings, which they use to pay their expenses and dividends before remitting their earnings to the Treasury. The Federal Reserve Bank of New York also conducts (but does not participate in) auctions of new federal debt securities. Fiscal policy — how the government raises and spends money — is decided by Congress, not by the Federal Reserve.

Q7: Did Woodrow Wilson regret creating the Fed?

A7: No. A supposed regretful quote from him ("I am a most unhappy man...") is assembled from words that he said and wrote, but not about creating the Fed. See the Wikiquote page for Wilson.

Q8: I have a book/web site/video that contradicts these answers.

A8: Works claiming that the Federal Reserve is the creation of a sinister banker conspiracy have been raised here many times before. There are separate articles about writers and works that make such claims, like G. Edward Griffin and America: Freedom to Fascism. However, they are not mentioned in this article, because they are not widely acknowledged among authors who write about the Fed, even to criticize it. Wikipedia aims to fairly represent the significant points of view on a subject but not to promote fringe theories held by a tiny minority of adherents.

Q9: Where can I find more answers about the Federal Reserve?

A9: The Board of Governors has its own frequently asked questions list.

Discussions on this page often lead to previous arguments being restated. Please read recent comments, look in the archives, and review the FAQ before commenting.

This article is written in American English, which has its own spelling conventions (color, defense, traveled) and some terms that are used in it may be different or absent from other varieties of English. According to the relevant style guide, this should not be changed without broad consensus.

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Archives

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This page has archives. Sections older than 40 days may be automatically archived by .

Income tax

No discussion on the history of the national income tax being paired with fed reserve creation? Also, no discussion on where some of citizens tax money goes, to interest payments on the national debt? 173.172.127.147 (talk) 02:26, 13 January 2022 (UTC)[reply]

You are confusing disparate subjects. You would need to make specific proposals, backed by valid references in order to start a discussion. SPECIFICO talk 02:36, 13 January 2022 (UTC)[reply]

No, because it wasn't, and no, because it's irrelevant. 67.180.143.89 (talk) 00:25, 10 February 2022 (UTC)[reply]

FAQ

I have rewritten the talk page FAQ to address questions / objections raised frequently on this talk page. A link to the Board of Governors' FAQ is included at the end. 67.180.143.89 (talk) 05:39, 10 February 2022 (UTC)[reply]

Term Deposit Facility

User:A. C. Santacruz tagged this section for excessive use of quotations. The section is mostly quotations, one of which spans four paragraphs. I condensed and paraphrased it, and this was reverted by User:Beauty School Dropout who called it "unhelpful" and said that "disputed topics" should be discussed. First, I was acting on someone else's request, which is the definition of "helpful." Second, I don't see a content dispute here. No concern about the neutrality or factual accuracy of the section has been raised. If someone wants to make a case for keeping the section as it was, they can do that here. Otherwise there is no dispute, only obstruction. 67.180.143.89 (talk) 16:30, 27 February 2022 (UTC)[reply]

IP, please do not attribute your edits to me. I do agree that the section was over-quoted heavily, but I am not accountable or responsible for how you respond to a clean-up tag that I place. I'll take a look later to see if I agree or not with your edit, and if not I'll propose some alternative phrasing. Let's all try to resolve this constructively without engaging in an edit war. A. C. Santacruz ⁂ Please ping me! 20:05, 27 February 2022 (UTC)[reply]

Kiwipete and Beauty School Dropout, I believe IP's summary is more encyclopedic than the previous version. If there are any things you believe they shouldn't have removed, I suggest we build upon IP's version. Feel free to discuss below. A. C. Santacruz ⁂ Please ping me! 20:39, 27 February 2022 (UTC)[reply]

It looked like page blanking to me. A. C. Santacruz I'm going to back out of this discussion and let more experienced and knowledgeable Wikipedians such as yourself decide the fate of this one. Beauty School Dropout (talk) 20:42, 27 February 2022 (UTC)[reply]

Beauty School Dropout, that's fair. Your wikignoming is appreciated :) ! A. C. Santacruz ⁂ Please ping me! 20:50, 27 February 2022 (UTC)[reply]

Yes, I'm with Beauty School Dropout on this one - I'm not a subject matter expert, just a pending changes reviewer, so I'll leave it to more knowledgeable people to resolve. I'll say this, though, to IP - I'm much more likely to revert anonymous changes than those done by registered users, so you might do yourself a favour and create an account. Cheers, Kiwipete (talk) 08:06, 28 February 2022 (UTC)[reply]

Move discussion in progress

There is a move discussion in progress on Talk:Dual mandate (politics) which affects this page. Please participate on that page and not in this talk page section. Thank you. —RMCD bot 21:17, 5 February 2025 (UTC)[reply]

Reference [25] out of date.

Section in question: Although an instrument of the U.S. government, the Federal Reserve System considers itself "an independent central bank because its monetary policy decisions do not have to be approved by the president or by anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms."

Section uses a reference to the FAQ website from 2015 that does not accurately represent the current consideration of the Fed. The Current FAQ website, which the reference points to, has no quote: "an independent central bank because its monetary policy decisions do not have to be approved by the president or by anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress, and the terms of the members of the board of governors span multiple presidential and congressional terms."

Rather, it states: "The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress. The Federal Reserve derives its authority from the Congress, which created the System in 1913 with the enactment of the Federal Reserve Act. This central banking "system" has three important features: (1) a central governing board—the Federal Reserve Board of Governors; (2) a decentralized operating structure of 12 Federal Reserve Banks; and (3) a blend of public and private characteristics." 24.225.145.61 (talk) 17:04, 19 February 2025 (UTC)[reply]

An archived version appears to support the text: [1] EvergreenFir (talk) 18:36, 19 February 2025 (UTC)[reply]