Congress created the Federal Reserve in 1913 with 12 individual Reserve Banks, overseen by a seven-member Board of Governors in Washington, D.C. The Fed’s unique public/private structure operates independently within government but not independent of it. Fed Governors are appointed by the President of the United States and confirmed by the Senate and serve 14-year terms to encourage a long-term perspective and to shelter them from partisan politics. Federal Reserve Bank presidents are selected in a nonpolitical process by their boards of directors, subject to the approval of the Board of Governors in Washington.
Each Reserve Bank has a nine-member board of directors selected to represent a cross-section of banking, commercial, agricultural, industrial, service, labor, consumer, and public interests within a Federal Reserve District. The Board of Governors has established policies regarding the roles and responsibilities of Reserve Bank directors.
Within this framework, the Philadelphia Fed’s board operates under a set of bylaws and has established an Executive Committee and three other standing committees: Audit; Management and Budget; and Nominating and Governance.
This structure imposes accountability while providing for a diversity of regional inputs on banking and monetary policy. Recognizing that the Federal Reserve is ultimately accountable to the American people, the Fed has steadily improved transparency about its actions in recent years. In that spirit, the Philadelphia Fed is posting its Code of Conduct and Transparency and Accountability Policy.
The Code of Conduct and the related documents are part of a comprehensive ethics program that incorporates regular training, annual certifications from employees that they understand and adhere to the Code of Conduct, and submission of disclosure statements by key officers and employees. All officers and employees are prohibited from owning bank stocks and certain other financial assets in order to avoid the potential for a financial conflict of interest in connection with the Fed's supervisory responsibilities.