Definition
The term Board of Governors refers to a team of individuals that direct and supervise actions of the Federal Reserve System. The Board of Governors consists of seven members appointed by the President of the United States.
Explanation
The Federal Reserve System was created in 1913 as part of the Federal Reserve Act, which was promulgated following a number of disruptive financial events. Both the Great Depression and the Great Recession resulted in an expansion of the Federal Reserve's role in protecting the United States' economy. The Federal Reserve regulates monetary policy, minimizes the risk to financial systems, ensures the safety of individual financial institutions, and provides consumer protections. All of these activities occur under the direction and supervision of its Board of Governors.
There are seven members of the Board of Governors, which are appointed by the President of the United States and confirmed by the United States Senate. Each governor serves for a term of 14 years and the terms are staggered, with one position expiring on January 31st of even numbered years. While a governor cannot be reappointed to a second 14-year term, if the governor served a partial term, they can be reappointed. Once placed on the Board of Governors, the member cannot be removed from office based on their political views. The Chair and Vice Chair are appointed by the President and serve a four-year term in that role. They can be re-nominated to this position until their 14-year term expires.
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