There are 12 Federal Reserve district banks across the United States

The Federal Reserve system is split into 12 regions, each with its own district bank. These banks are located in major cities: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. Each one serves the banks and communities in its region, though they all answer to the Federal Reserve Board in Washington, D.C.

The 12-district structure has been in place since 1913, when Congress created the Federal Reserve system. The number 12 was chosen to divide the country into regions where a single bank could reasonably serve all the commercial banks in its area. Some districts cover just a few states; others cover much larger territories. The New York Federal Reserve, for example, covers New York, New Jersey, and Connecticut, while the San Francisco Federal Reserve covers nine western states and territories.

Key Takeaways

  • The 12 Federal Reserve district banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
  • Each district bank serves the commercial banks in its region and carries out Federal Reserve policy decisions made by the Board of Governors in Washington, D.C.
  • The districts vary in size: some cover a few states while others cover nine states and territories.
  • District banks handle check clearing, currency distribution, and supervision of banks in their region, but they do not take deposits from the public.

What each district bank actually does

District banks are not like the bank branch you might visit to deposit a check. They work with other banks, not with individual customers. Each district bank processes checks between banks, distributes new currency and coins, and supervises the commercial banks in its region to make sure they follow federal rules.

When the Federal Reserve Board in Washington decides to change interest rates or adjust monetary policy, the 12 district banks carry out those decisions in their regions. They also research economic conditions in their districts and report back to the Board. The Federal Reserve Bank of New York has extra responsibility: it manages the system's open market operations, which means it buys and sells government securities on behalf of the entire Federal Reserve system.

How the districts are organized geographically

Congress divided the country into 12 districts based on population and economic activity at the time the Federal Reserve was created. The boundaries have not changed since then, even though the country's population and economy have shifted significantly.

The largest district by area is the San Francisco Federal Reserve, which covers California, Nevada, Utah, Arizona, Hawaii, Alaska, Guam, American Samoa, and the Northern Mariana Islands. The smallest is the Boston Federal Reserve, which covers just Massachusetts, Rhode Island, Connecticut, and Vermont. The New York Federal Reserve covers the smallest geographic area but serves one of the largest financial centers in the world.

The Federal Reserve Board versus the district banks

The Federal Reserve Board of Governors sits in Washington, D.C., and makes the major policy decisions for the entire system. The 12 district banks implement those decisions and handle the day-to-day work of banking supervision and operations in their regions.

The Board of Governors has seven members appointed by the President and confirmed by the Senate. The district banks are technically private corporations owned by the commercial banks in their regions, though they operate under federal law and answer to the Board. This structure was designed to balance federal oversight with regional independence, though in practice the Board makes the major decisions and the districts follow them.

Why 12 districts instead of a different number

When Congress created the Federal Reserve in 1913, lawmakers had to decide how many regional banks to establish. Too few would mean each bank covered too large an area to serve banks effectively. Too many would create duplication and waste. The number 12 was a compromise that reflected the economic geography of the time.

The districts have never been reorganized, even though the country's economy has changed dramatically since 1913. Some economists have argued that the current boundaries no longer match where economic activity actually happens, but changing them would require an act of Congress and would disrupt the system, so the 12-district structure remains.

Which district bank serves your area

If you live in the United States, you are in one of the 12 Federal Reserve districts. Your district bank does not directly serve you as a customer, but it supervises the banks in your area and carries out Federal Reserve policy that affects interest rates and credit availability.

You can find which district you are in by looking at the Federal Reserve's website and entering your state. The district banks publish economic reports about their regions and hold public meetings where you can learn about economic conditions and policy decisions. These reports and meetings are open to anyone interested in understanding how the Federal Reserve works in your area.

Frequently Asked Questions

Can I open an account at a Federal Reserve district bank?

No. Federal Reserve district banks do not take deposits from the public. They work only with other banks and government agencies. If you want to open a bank account, you need to go to a commercial bank, credit union, or online bank.

Does the Federal Reserve print money?

The Bureau of Engraving and Printing makes the physical currency, but the Federal Reserve system distributes it. The 12 district banks receive new currency and coins from the Bureau and send them to commercial banks in their regions, which then distribute them to customers.

Why does the New York Federal Reserve have special power?

The New York Federal Reserve manages the Federal Reserve's open market operations, which means it buys and sells government securities to influence interest rates and the money supply. This role was given to New York because it is the nation's largest financial center and has the infrastructure to handle these large transactions.

Can a district bank fail?

No. District banks are part of the Federal Reserve system and are backed by the federal government. They cannot fail in the way a commercial bank can. If a district bank had financial problems, the Federal Reserve Board would address them.

How often do the district banks meet?

The Federal Reserve's policy committee, called the Federal Open Market Committee, meets eight times a year to make decisions about interest rates and monetary policy. District bank presidents participate in these meetings and also serve on various committees that advise the Board of Governors.