The Board of Governors for the Federal Reserve Bank recently announced new efforts to ramp up its diversity initiatives. Most notably, the Fed will be establishing offices to promote diversity at each of the central bank’s twelve offices nationwide, in addition to implementing new measures to increase diversity within the Board of Governors itself.
The Federal Reserve hopes to focus on diversity in procurement, especially for minority-owned and women-owned businesses. According to the Board, the initiative is a direct result of the Dodd-Frank Wall Street Reform and Consumer Protection Act which requires the Board and its Federal Reserve branches to establish such offices.
The Federal Reserve was established in 1913. As the central bank of the United States, the Federal Reserve is primarily responsible for the nation’s monetary policy. Monetary policy refers to actions taken to impact the cost of money primarily by influencing the supply of money in the economy.
The Federal Reserve uses a number of tools to influence money supply. Chief among these tools are its ability to set the interest rates at which member banks can lend each other overnight; setting the interest rate for lending money directly to member banks; establishing the percentage of deposits that must be kept in reserve with the central bank; and buying and selling U.S. Treasury notes.
In addition, the Federal Reserve regulates banks that are members of the Federal Reserve System, enforcing laws such as the Community Reinvestment Act.