The Board of Governors is a managing body of the Federal Reserve System. The Federal Reserve Board is empowered by the US Government to set policy on banking regulation and the money supply, both matters vital to the US economy.

Specifically, the Fed is primarily responsible for setting monetary policy to ensure a stable currency and economic growth.

Monetary Policy

The Fed controls the cost and availability of money through the actions decided by the Federal Open Market Committee (a 12-members group, 7 from the Fed Board, 4 rotating from regional bank presidencies and the president of the Federal Reserve Bank of New York) The FOMC sets reserve requirements (the percentage of deposits banks are required to hold on reserve), the discount rate (essentially the prime interest rate, or the cost of short term lending) and open market operations (where the Fed may move markets through intervention)

Bank Regulation

The Board of Governors also broadly regulates banks that operate inside the United States. Regulating what activities banks may perform and how they may perform them, as well as facilitating an efficient and continuously improving bank settlement system.

Board Membership

Members to the 7-person board are appointed by the president and confirmed by the senate to 14-year terms.

For more information on the above term, try: Monetary Policy Money And Interest Rates - By Country