Federal Reserve Districts: A Lot Can Change In A Century

Federal Reserve Districts: A Lot Can Change In A Century by Aaron Klein, Olivia V. Weiss – Bipartisan Policy Center

In establishing the Federal Reserve, America’s third central bank (the first two didn’t last very long), Congress created a hybrid system involving a Board of Governors based in Washington, D.C. and a system of 12 regional banks scattered across the United States. Carving out the specific regions was designed to balance factors such as size and economic activity, and with some political calculations involved. “Since then the country has changed dramatically,” Senate Banking Committee Chairman Richard Shelby (R-AL) recently noted to Federal Reserve Chair Janet Yellen when asking her about this very issue.

When first established in 1913,...