[7][8] As stipulated by the Banking Act of 1935, the Chairman is chosen by the president from among the sitting governors to serve four-year terms with the advice and consent of the Senate.

[12] Under the chairman's leadership, the Board's responsibilities include analysis of domestic and international financial and economic developments.

The board also supervises and regulates the Federal Reserve Banks, exercises responsibility in the nation's payments system, and administers consumer credit protection laws.

[13] By custom, one of the chairman's most important duties is to serve as the chair of the Federal Open Market Committee (FOMC), which is critical in setting short-term U.S. monetary policy.

He or she also testifies before Congress on numerous other financial issues and meets periodically with the treasury secretary, who is a member of the president's Cabinet.