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Definition: Federal Advisory Council
Federal Advisory Council is one of the formal bodies who advise the Federal Reserve Board on its operations of the state banking sector. This council comprises of 12 members one each from the Federal Reserve District regarding the banking industry and money supply. Each member is elected from their Federal Reserve District through a voting process.
They are often elected for more than one term and the meetings of the council take place every quarter or more frequently during a period of financial crisis. Four times a year are the minimum number of meetings per year. These meetings are held in Washington D.C. Every year each reserve bank elects one member from their district to represent them in the FAC. Usually each term is of one year and one member can serve up to three times. The council members elect the officers of the FAC.
Federal Reserve Board is advised by three committees: The Federal Advisory Council, The Community Advisory Council and The Community Depository Institutions Advisory Council Out of these three bodies only the Federal Advisory Council is created by law the other two bodies were created by the Federal Reserve Board.
The Federal Reserve Board is the central bank of the United States of America. Monetary and credit policies are made for the nation by this body and it is also responsible for maintaining the banking industry. To perform the tasks of the Federal Reserve Act, rules and regulations are formulated by this body. The most crucial function is manipulating the rate of interest for the credit policy. The amount of credit that can be given initially or sustained on any securities to prevent excessive use of credit is also regulated by the board.
The U.S. President appoints the Board which is composed of seven members, with the consent of the Senate. From the seven governors the Chair must be chosen who serves a four year term which can be renewed. The board of governors corporate with the other aspects of the Federal Reserve System comprising of Federal Reserve Banks (12) and their 25 branches. The board members help maintain a robust commercial banking system which reacts to the requirements of the nation. The locations for the 12 Federal Reserve banks are Philadelphia, Atlanta, Chicago, St. Louis, Minneapolis, Cleveland, Dallas, Richmond San Francisco, Boston and New York.