what major banks own "shares" in the member banks of the federal reserve?

Question

does this mean the federal reserve is still government owned?

FOR VOXYGEN, I DONT SEE HOW I TANGLED ANYTHING, YOUR "ARGUMENT" IS HOWEVER TANGLED UP .

YOU ARE SAYINGTHAT THE LAW REQUIRES THEM TO BE INVESTED IN THE FED, WELL, I GUESS THAT IS BECAUSE THESE PRIVATE BANKS LOBBIED CONGRESS IN THE BEGINNING TO ALLOW THEM TO CREATE THE FED. AND THIS "REQUIREMENT" IS A "TANGLED UP" ARGUMENT. THIS LAW WAS MORE OR LESS PASSED BY THEIR LOBBIES TO CONGRESS JUST LIKE THEY HAD DONE FOR THE CREATION OF THE FED.

AND BY YOUR SAYING THAT THIS IS A "GOVERNMENT INSTITUTION" WELL I THINK YOU OR THE DICTIONARY IS LIEING.

Answer 1

Actually it is very easy to figure out.

The law says that member banks must purchase shares based on their size. So the biggest banks have the most shares. The three biggest U.S. banks are: (ref: http://www.gfmag.com/2004/Oct/c_ci/fe_art01.php)

- Citigroup
- JPMorgan
- Bank of America

Does that mean the Federal Reserve *System* is still government owned? Yes

The Federal Reserve System is organized with a government agency at the top (the Board of Governors), and branches beneath them that resemble private corporations. (http://www.federalreserveeducation.org/fed101/structure/ )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level. Board members are forbidden by law to have any economic interest in a private bank.

The 12 branches, however, are organized similar to corporations. Member banks are required to buy shares in their branch. They can vote for 6 of their 9 board members. The shares get a standard 6% dividend. These shares cannot be sold on the open market. All 'profit' from the Federal Reserve branches are turned over to the Treasury at the end of the year. Is this private ownership? The Feds say No http://www.federalreserve.gov/generalinfo/faq/faqfrbanks.htm#6 ) but it is the subject of much debate.

I equate the arrangement to a government agency (the Board of Governors) contracting out the day to day operations to a tightly controlled and regulated company.

Voxygen answers are correct. Could you cite what dictionary you used for your info on the Federal Reserve?

Answer 2

I think you've tangled the question. In the Federal Reserve System there are 12 regional Federal Reserve Banks. All banks with a U.S. national charter must be members (shareholders) of at least one regional Federal Reserve Bank. State chartered banks may choose to become members but most don't.

As asked, yes, an investment bank, such as Goldman Sachs, could own shares in Citicorp if it wanted, and etc.

The Federal Reserve System is a government agency; however, for certain legal purposes, the Federal Reserve Banks within the System may be treated as corporations.