Banking in the United States

The United States has the decentralized Federal Reserve System in which there are 12 District Federal Reserve Banks, each serving a region of the country. A bank in a specific district would use its own District Federal Reserve as its central bank.

The Federal Reserve System, also known as the Fed, is created by and responsible to US Congress, but Each District Federal Reserve Bank is owned by its member banks. Each member bank contributes 3 percent of its capital stock to the district Federal Reserve Bank and another 3 percent to the Fed.

There are more than 12,000 banks in the country and about 5,000 are chartered nationally and the rest state chartered. All nationally chartered banks must be members of the Fed and the state chartered banks can choose to be members.

The Fed has its own monetary policy that can differ from that of government. It acts as the watchdog of the money supply, interest rates and the economy's price level. Its key responsibility is to safeguard the proper functioning of the money system in the US.

The Fed is run by a Board of Governors, which meets in Washington, D.C. The Board consists of seven members. The members are appointed by the President and confirmed by the Senate. Each serves a 14-year term. The chairman, a board member, is appointed by the US President for a four-year term.

The 12 District Banks are run and managed by a board or nine directors. Six of them are selected by the member banks and the three others appointed by the Fed's Board or Governor. Each district bank is led by a president who is selected by the nine directors.

Banking hours in the US are 9am to 3pm from Monday to Friday. The unit of currency is the US dollar which is divided into 100 cents. Every state in the country has its own Banking and landing laws. Each state has its own banking commission or finance department.

Credit cards and traveler checks are accepted by almost all banks but only some major banks exchange foreign currency. ATMs you can find in all corners of the country. Some prominent banks in the US are Bank of America, SunTrust Bank, Royal Bank of Scotland, HSBC Bank, Citibank of America.