Know more about the Fed than Rand Paul does

The Kentucky Republican was called out for the accuracy of recent comments about the Federal Reserve. But how much do you know? Here's a primer.

An occasional series to help you explain how things work to clients.
In a speech in Iowa this past Presidents’ Day weekend, Sen. Rand Paul, R-Ky., criticized the Federal Reserve, but was called out by experts for having a limited understanding of how the institution actually works.
How well do you know the Fed?

The Federal Reserve is governed by a seven-member board appointed by the president and confirmed by the Senate. The term of service is 14 years. The chairman and vice chairman serve four-year terms. There are currently two vacancies on the board.
There are 12 regional Federal Reserve Bank presidents who are appointed by each bank’s board of directors.
The Fed has a mandate from Congress to set monetary policy to achieve maximum employment and price stability. The Fed also oversees the U.S. banking system. Specifically, the Board of Governors is in charge of determining the discount rate and reserve requirements and the Federal Open Market Committee (see below) is responsible for buying and selling securities on the open market.
The 12-member FOMC (made up of the seven-member board, New York’s Federal Reserve Bank president and four other rotating Reserve Bank presidents) meets at least eight times per year. Results of meetings are posted online and announced to the media.
Congress is responsible for overseeing the Federal Reserve, and the Government Accountability Office audits the Fed’s activities. The Board of Governors also engages an external auditor, currently Deloitte and Touche, to review its financial statements and those of the Reserve Banks. The Fed chairman testifies before Congress at least twice a year.
Board members’ salaries are determined by Congress. Chairwoman Janet Yellen’s salary for 2014 was $201,700, and the other members received $181,500.
The Fed had $4 trillion in assets as of Dec. 31, 2013, mostly in Treasury securities and mortgage-backed securities.
The Fed earned about $79 billion in net income in 2013. Profits are sent to the Treasury Department.

Correction: The original version of this story said the Treasury Secretary and Comptroller of the Currency held seats on the Board of Governors, which is not correct. Two seats on the board are currently vacant. It also mistakenly labeled the regional presidents as governors in the first reference.