Is the Federal Reserve a Private or Public Bank?

Is the Federal Reserve a Private or Public Bank?

The Federal Reserve, aka "the Fed" was created on December 23, 1913 with the enactment of the Federal Reserve Act due to financial crisis.

Some people hate the Fed because it's a private bank, and other people hate the Fed because it's a public bank... so which one is it?

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
  • The "Board of Governors" or "Federal Reserve Board" (FRB) is clearly public - presidentially appointed.
  • The boards of the 12 regional Fed Banks which oversee private banks are democratially ellected by shareholders.
  • The Federal Open Market Commitee includes the FRB (7 members) and presidents of the 12 regional banks. But, to insure that the odds are always stacked in the public interest only 5 bank presidents vote at a time.
  • The US Tresury prints the money that the Fed uses, and recives profits.

The fact is clear, even if many people can't get past their inane Black/White thinking - and the lies about the Fed that circulates endlessly - the Fed is both public and private.

Federal Reserve Remittances to the U.S. Treasury

In 2019 the Fed profited ~$55.5 billion and transered ~$54.9 billion to the U.S. Treasury - after taking out salaries, bolstering surplus, and the 6% divident on member bank's capital investment.

Net income for 2019 was derived primarily from $102.8 billion in interest income on securities acquired through open market operations--U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities, and GSE debt securities. The Federal Reserve Banks had interest expense of $35.0 billion primarily associated with reserve balances held by depository institutions, and incurred interest expense of $6.0 billion on securities sold under agreement to repurchase.

Over the years the Fed has grown more and more powerful as they balance the books when the private banking system fails - again and again - as the traditionally upper class Federal Government uses public resources to bail out the private sector. It's an important part of the modern economy, but it can also be reformed to better serve the public which enables it's power.

The Fed is regularly audited, and news agency law suits for Fed doccuments have held up in the supreme court - more forthright transparancy is required.

In addition, the Fed needs to work for the benifit of all citizens and not just the capitalist class. It can do this by adding direct dispursments to businesses and individuals rather than merely padding the accounts of the largest banks in the nation via Quantititive Easing (QE).


Mixed Public/Private Banking used to be common in the United States.

When Bank.Rehab advocates for Public Banking we advocate for both pure Public Banks as well as mixed Public/Private Banks - like the Federal Reserve.