The Lender of Last Resort: Is There a Role for the ECB?

Born to address banking panics, today the Federal Reserve has broader tasks than only ensuring the stability of the financial system:

- To serve as the United States central bank.

- To manage the nation's money supply through monetary policy to achieve maximum employment, stable prices and moderate long-term interest rates.

- To maintain the stability of the financial system and contain the systemic risk in financial markets.

- To provide financial services to depository institutions, the U.S. government, and foreign official institutions.

- To play a major role in operating the nation's payments system, responding to liquidity needs.

As the nation's central bank, the Federal Reserve has the authority and financial resources to act as lender of last resort by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy.
The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors (or Federal Reserve Board), the Federal Open Market Committee (FOMC), twelve regional Federal Reserve Banks located in major cities throughout the nation, numerous privately owned U.S. member banks and various advisory councils.

The seven-member Board of Governors is a federal agency charged with the overseeing of the regional banks and setting national monetary policy. It also supervises the US banking system in general.
The Federal Open Market Committee comprises all seven members of the Board of Governors and the twelve regional bank presidents, though only five bank presidents vote at any given time. Its main task is to oversee open market operations, the main tool for monetary policy.
The twelve regional banks act as the operating arms of the system providing grassroots economic information and input on management and monetary policy decisions. Each Federal Reserve Bank has its own nine-member board, but is subject to oversight by the system's Board of Governors.
They must not be confused with the member banks, privately owned corporations which hold stock in one of the twelve regional Federal Reserve banks. The stock cannot be sold or traded and pays a fixed 6% dividend annually.
Member banks do not directly control the applicable Federal Reserve Bank as a result of owning this stock. They do, however, elect six of the nine members of Reserve Banks' boards of directors.
The Federal Reserve System has thus both private and public components, and was designed to serve the interests of both the general public and private bankers. The result is a structure that is considered unique among central banks.
It is also unusual in that an entity outside of the central bank, namely the United States Department of the Treasury, creates the currency used.