The Federal Reserve Bank of St. Louis is one of 12 regional Federal Reserve Banks scattered across the U.S. Combined, these 12 banks help regulate monetary policy and ensure local banks are compliant with consumer protection laws. The St. Louis Fed is known for its research operations.
Here’s a closer look at how the Federal Reserve Bank of St. Louis works.
Definition and Examples of the Federal Reserve Bank of St. Louis
The Federal Reserve Bank of St. Louis is one of 12 regional banks that make up the U.S. central banking system. The regional banks work with the Board of Governors in Washington, D.C. and the Federal Open Market Committee (FOMC) to ensure our economy runs smoothly.
- Alternate name: St. Louis Fed
As an individual, you can’t open a bank account at the Federal Reserve Bank of St. Louis. It only serves financial institutions and government entities.
The St. Louis Fed serves the Eighth Federal Reserve District, which includes all of Arkansas and parts of Missouri, Illinois, Indiana, Kentucky, Tennessee, and Mississippi. It has branches in Little Rock, Louisville, and Memphis.
According to its website, the St. Louis Fed’s primary job is to:
- Promote stable prices and economic growth
- Foster a sound financial system
- Provide banking services to financial institutions
- Support the U.S. Treasury
- Increase economic knowledge, community development, and fair access to credit
For example, suppose you have a checking account with a local bank in Fayetteville, Arkansas. The Federal Reserve Bank of St. Louis would supervise this bank to ensure it’s functioning soundly and treating its customers fairly. It would also act as the bank’s bank, holding its reserves and lending it money when needed.
Missouri is the only state that has two Federal Reserve Banks. The other is located in Kansas City.
How the Federal Reserve Bank of St. Louis Works
The Federal Reserve Bank of St. Louis exists to help promote a healthy economy, regulate inflation, and keep the U.S. financial system stable. One way it does this is by supervising depositories in its district and providing banking services to them.
For example, all depository institutions must keep a certain percentage of their deposits as cash on hand. (This is known as a federal reserve requirement.) Banks in the Eighth District can keep these funds in a reserve account at St. Louis Fed. If they ever don’t have enough money to meet reserves, they can borrow money from them as well.
Secondary Functions of the St. Louis Fed
The Federal Reserve Bank of St. Louis has a long history of research and publication on economic topics. Its research staff includes economists, statisticians, and financial analysts who produce a variety of publications on the economy and monetary policy.
It publishes this data for the whole country and specific regions on the Federal Reserve Economic Database (FRED). They track everything from inflation and unemployment rates to Treasury yields and federal balance sheet data in this database.
The Federal Reserve Bank of St. Louis also operates the Institute for Economic Equity to promote equitable economic opportunity for households, and hosts several educational events and programs to promote financial literacy in its district.
St. Louis became the headquarters for the Eighth Federal Reserve District in 1914. It was the country’s fourth-largest city at the time and was chosen by the Reserve Bank Organization Committee (RBOC) after hearing supporting arguments for 37 cities.
The first governor of the St. Louis Fed was Rolla Wells, who served from 1914 to 1919. As of the time of publication, the president is Dr. James Bullard, who’s been serving since April 1, 2008. In 2021, Bullard was a voting member for the Federal Open Market Committee (FOMC)—something all Federal Reserve presidents do on a rotating basis.
The other 11 Federal Reserve Banks are located in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York City, Philadelphia, Richmond, and San Francisco. They’re decentralized to prevent any one city from holding too much power.
Frequently Asked Questions (FAQs)
Who owns the St. Louis Fed?
The St. Louis Fed is not owned by any particular person or company, and it operates independently of the government. However, the U.S. president nominates members to the Board of Governors and their positions are confirmed by the Senate.
The Federal Reserve System is considered to be one of the most important institutions in the United States, and it plays a major role in shaping the economy.
Why does Missouri have two Federal Reserve Banks?
No one knows definitively why Missouri has two Federal Reserve Banks. Many people believe politics played a huge role, while others say the two cities won on their own merits. Nonetheless, the state is split between the Eighth District, which is served by the St. Louis Fed, and the Tenth District, which is served by the Kansas City Fed.
- The Federal Reserve Bank of St. Louis, also known as the St. Louis Fed, is one of 12 banks that make up the U.S. central banking system.
- The Federal Reserve Bank of St. Louis serves the Eighth District, which includes all of Arkansas and parts of Missouri, Illinois, Indiana, Kentucky, Tennessee, and Mississippi.
- The Federal Reserve Bank of St. Louis plays a vital role in monitoring financial institutions in its district and promoting steady prices and economic growth in the U.S.
- Missouri is the only state that has two Federal Reserve Banks. The other is located in Kansas City.
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