It’s an independent sector of the federal government because its decisions do not need ratification by Congress or the president. The Federal Reserve was created with the intention of making sure the U.S. economy is stable, and to regulate financial institutions.

There is a Fed bank located in each of the 12 Fed districts. Banks lean on the Federal Reserve to borrow money when there are no other avenues to do so. It conducts monetary policy, regulates banks, maintains the stability of the financial system, and provides financial services to U.S. banks, foreign governments and the public. Formally known as the Federal Reserve, the Fed is the gatekeeper of the U.S. economy. One of the more mysterious areas of the economy is the role of the Fed. There is a Fed bank located in each of the 12 Fed districts. The Federal Reserve, commonly referred to with no disrespect as the Fed, is the central bank of the U.S. Federal Reserve Banks: The Federal Reserve Banks work with the board to supervise commercial banks and implement policy. The Fed regulates financial institutions, manages the nation's money and influences the economy. It is the central bank of the United States -- it is the bank of banks and the bank of the U.S. government.