No private person, bank, or company owns the Federal Reserve. Congress created the Federal Reserve System under the Federal Reserve Act of 1913, and the Board of Governors states in its official FAQ on ownership that the System “is not ‘owned’ by anyone.” The confusion has a real source: commercial banks that join the System hold stock in their regional Reserve Bank. That stock works differently from shares in an ordinary company, and the sections below explain how.
Why the question comes up
“The Fed” is often used as if it were one company with shareholders. It is not. The Federal Reserve System combines three distinct parts, and each has a different legal status, so the answer to “who owns it” depends on which part you mean.
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The three parts of the Federal Reserve System
The Board’s FAQ on how the System is structured identifies three key entities. The table below sets out what each one is and how it is governed.
| Component | Public status | Main role | Ownership or governance characteristics |
|---|---|---|---|
| Board of Governors | Federal agency, directly accountable to Congress | Provides general guidance and oversees the Reserve Banks | Not owned by member banks; appoints the Class C directors of each Reserve Bank |
| Federal Open Market Committee (FOMC) | Part of the System’s federal structure | Sets monetary policy for the System | Not described in terms of shareholders or member-bank stock |
| 12 Federal Reserve Banks | Regional banks with corporate characteristics, operating under Board oversight | Perform regional operating functions | Member banks hold stock in their District Reserve Bank as a condition of membership; governed by nine-member boards |
Keeping these three apart resolves most of the confusion. Member-bank stock belongs to the regional Reserve Banks. The Board of Governors and the FOMC are not shares of anything.
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What Reserve Bank stock actually means
Commercial banks that are members of the System hold stock in their District Reserve Bank. According to the Federal Reserve’s own FAQ, this stock is different from ownership shares in a private company, for several reasons:
- It is required by law. Holding the stock is a condition of membership, not an investment a bank chooses for its return.
- The Reserve Banks are not operated for profit. Their business is central banking, not maximizing payouts to shareholders.
- Net earnings go to the U.S. Treasury. After expenses, legally required dividends, and a limited surplus allocation, the Banks transfer what remains to Treasury.
Member banks therefore hold a legal interest in their regional Reserve Bank, but that interest does not extend to the Board of Governors, the FOMC, or the System as a whole. Saying that private banks “own the Fed” leaves out every one of these conditions, which is why it misleads.
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How the Reserve Banks are governed
Each of the 12 Reserve Banks is run by a nine-member board, divided into three classes. The Board’s overview of Reserve Bank directors sets out the structure, and the 2024 annual report on System organization describes the same class arrangement.
| Class | Number of directors | Who selects them | Whom they represent |
|---|---|---|---|
| Class A | 3 | Elected by member banks | Stockholding member banks |
| Class B | 3 | Elected by member banks | The public |
| Class C | 3 | Appointed by the Board of Governors | The public |
The Board of Governors also designates the board chair and deputy chair from among the Class C directors. The result is a mixed governance model: banks elect directors who represent them and the public, and the federal Board appoints directors who represent the public.
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Accountability and independence
The Board of Governors reports to and is directly accountable to Congress. Congress sets the goals of monetary policy. The Federal Reserve states that decisions by the Board and the FOMC about how to achieve those goals do not require approval from the President or from other executive or legislative officials.
These are two separate facts. The Fed is publicly accountable, because Congress defines its goals and can oversee its work. Its day-to-day policy choices, however, are made without executive sign-off. Neither fact supports the idea that the Fed belongs to a private owner.
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Claims to avoid
- “The Federal Reserve is privately owned.” The Board’s FAQ says the System is not owned by anyone, and it was created by Congress.
- “Member banks own the Board of Governors.” Member-bank stock is held in the Reserve Banks. The Board is a federal agency.
- “The government owns the Fed like a standard corporation.” The government does not hold shares in the System the way a shareholder holds a company. The System is a government-created central bank, with regional banks that have corporate features and member-bank stock.
The accurate description is simpler than any of these: a congressionally created central bank with a federal policymaking body, regional Reserve Banks that member banks participate in, and no owner in the ordinary sense.
For a broader overview of how the System is organized, see the Federal Reserve’s “Who We Are” page.
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