America 1919-Chapter 920 - 314, Federal Reserve_2

In more conservative major financial centers like New York, Chicago, and Philadelphia, banks are required to maintain the highest reserve ratio, at 18%.

In medium-sized cities, this ratio is 15%.

These regulations naturally led to rural banks being reluctant to join the Federal Reserve System, which resulted in another consequence.

The Federal Reserve became a club for large banks!

But regardless, after the establishment of the Federal Reserve System, those banks that joined it became member banks of the Federal Reserve.

To ensure unity and mutual development among all.

William Harding, the second chairman of the Federal Reserve, established the tradition of holding annual meetings with all member banks to foster closer and broader cooperation.

At the same time, William Harding also advocated for distributing higher dividends to bring greater benefits to the member banks.

During William Harding’s era, the annual meetings were held without fail, no matter the circumstances.

Now that Daniel Krisinger is the chairman of the Federal Reserve, even the annual meetings are at risk of being canceled, which shows just how weak his influence within the Federal Reserve has become.

"Breton Bank has agreed to participate!" Donnie said.

Breton Bank is also one of the member banks of the Federal Reserve.

"Of course, I know, Donnie, that you support me. The hateful ones are those other banks!"

Daniel Krisinger said angrily.

Donnie smiled and said, "Daniel, what you need now is a board member within the Federal Reserve who can speak up for you."

Daniel Krisinger sighed helplessly, "Of course, I know that, but those board members— they only listen to the influential families behind them. My voice...."

Daniel Krisinger’s current situation was indeed difficult, to the point that he even had to admit such things to Donnie.

"If Venus Bank can become a Federal Reserve board member, then I will surely speak on your behalf when the time comes!" frёeweɓηovel.coɱ

Donnie said calmly.

"Of course, but unfortunately, Donnie..." Daniel Krisinger finally realized what Donnie meant as he spoke.

"Donnie, you want Venus Bank to become a Federal Reserve board member? That’s impossible—those people would never agree."

It had already been mentioned earlier that, although there were many factions within the Federal Reserve, they could essentially be divided into three major parts!

First is the Federal Reserve Board of Governors, although now people prefer to refer to it simply as the Federal Reserve Council.

Nominally, the Federal Reserve Council is an independent agency under the federal government, reporting to Congress, providing general guidance to the Federal Reserve System, and supervising the 12 regional Reserve Banks.

The members of the Council are appointed by the President and confirmed by the Senate.

The Council typically includes one chairman, one vice chairman, and 5 to 7 other council members!

Members serve 14-year terms, while the chairman and vice chairman serve four-year terms, with reappointments allowed.

Second are the 12 regional Reserve Banks, which operate as the functional arms of the Federal Reserve System, essentially doing the actual work.

The 12 regional Reserve Banks and their 24 branch offices are the operational institutions of the Federal Reserve System, gathering commercial and community information from their respective jurisdictions and reporting it to the Council and the Federal Advisory Committee for monetary policy formulation.

Each Reserve Bank is managed and led by a nine-member board of directors.

The board members are divided into three categories: A, B, and C. Category A represents member banks, and Categories B and C represent the public.

Each category has three directors, with A and B directors elected by member banks and C directors appointed by the Council.

Every year, the Council designates one chairman and one vice chairman for each Reserve Bank from the C directors. The chairman is nominated by the B and C directors and appointed by the Council, serving a five-year term. In practice, the chairman acts as the CEO of the Reserve Bank.

Additionally, Reserve Bank chairmen hold voting rights in the election of members to the Federal Advisory Committee.

The branch offices of the Reserve Banks also have a board of directors with five to seven members. Most are appointed by the Reserve Bank, while a few are appointed by the Council. The branch office chairman is elected from among the Council-appointed directors.

The last component is the Federal Advisory Committee, which was mentioned earlier. This committee will later be renamed the Federal Open Market Committee.

The Federal Open Market Committee comprises members of the Council and select presidents of regional Reserve Banks, with its chairman typically being the chairman of the Council, commonly referred to as the Federal Reserve Chairman.

What Donnie wants now is to become a member of the Federal Reserve Council.

Once he enters the Federal Reserve Council, Donnie will have a legitimate path to join the Federal Open Market Committee.

"Why not?" Donnie said with a smile. "Regarding this, I have already reached an agreement with President Coolidge, Secretary Andrew Mellon, and influential families within the Council, like Morgan, Rockefeller, Warburg, and Rothschild."

Daniel Krisinger truly did not expect that Donnie had done so much behind the scenes.

Amidst his shock, Daniel Krisinger did not feel anger at Donnie for acting without informing him. Instead, he felt gratified.

Previously, he thought it was impossible for Donnie to persuade those people to allow him to join the Federal Reserve Council, but now it seemed that Donnie had successfully won everyone over without making a sound.

Now, Donnie’s path to becoming a member of the Federal Reserve Council seemed to face no significant obstacles.

"Daniel, if you can put forth my nomination, both I and my New Jersey backers will be deeply grateful to you!"