Finance, Forex and Investments

The FED loans money to the commercial banks at a certain interest rate (2%). Where does this money go?

Is each one of the 12 banks a private bank? Are there any stockholders or owners? I realize that I can't buy their stocks but I did read on one of their websites something about stockholders, so I am trying to figure out how the system works. I see that these banks have Directors and Officers, but who actually owns them?

Public Comments

1. The Federal Reserve Bank is a government entity that is part of the Treasury Department. Money loaned by the Fed goes nowhere but is used by the banks to cover shortfalls in their reserve requirements. This allows banks to lend as much money as legally possible without running afoul of the requirements. There are a number of other functions that the Reserve performs (clearinghouse for money)...most decent libraries carry good texts on monetary policy that describe the role of the Fed in the American and world economy.