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Federal Reserve System, central banking system of the United States, popularly called the Fed. A central bank serves as the banker to both the banking community and the government; it also issues the national currency, conducts monetary policy, and plays a major role in the supervision and regulation of banks and bank holding companies. In the U.S. these function are the responsibilities of key officials of the Federal Reserve System: the Board of Governors, located in Washington, D.C., and the top officers of 12 district Federal Reserve banks, located throughout the nation. The Feds actions, described below, generally have a significant effect on U.S. interest rates and, subsequently, on stock, bond, and other financial markets. The Federal Reserves basic powers are concentrated in the Board of Governors, which is paramount in all policy issues concerning bank regulation and supervision and in most aspects of monetary control. The board enunciates the Feds policies on both monetary and banking matter. Because the board is not an operating agency, most of the day-to day implementation of policy decisions is left to the district Federal Reserve banks, stock in which is owned by the commercial banks that are members of the Federal Reserve System. Ownership in this instance, however, does not imply control; the Board of Governors and the heads of the Reserve banks orient their policies to the public interest rather than to the benefit of the private banking system. | 
