The US Federal Reserve

Who owns the Federal Reserve?

Technically speaking, the Fed is not “owned” by anyone.

According to the Federal Reserve’s official website:

“Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors.

Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System.

In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.”

The Fed claims it derives it authority from Congress, which created the system in 1913 upon the introduction of the Federal Reserve Act.

Does Australia have a Federal Reserve?

The Reserve Bank of Australia (RBA) is Australia’s version of a central bank.

Its purpose is to support employment rates, stabilise the currency, and promote the financial prosperity and welfare of Australian citizens.

The RBA’S monetary policy aims to work towards an inflation target, maintain a strong financial system. It provides banking services to the Australian government and several overseas central banks and institutions, while managing Australia’s gold and foreign exchange reserves.

Like the Fed does in the US, it also issues the nation’s bank notes.