Final answer:
Each regional Federal Reserve Bank is owned by the commercial banks in its district, which hold stock and elect the Board of Directors responsible for selecting the bank's president.
Step-by-step explanation:
The Federal Reserve System comprises 12 regional Federal Reserve Banks, and each bank is owned by the commercial banks in its district. These member banks hold stock in their district's Federal Reserve Bank and, as stockholders, they are entitled to elect a Board of Directors. The directors, in turn, are responsible for selecting a president for each regional bank.
The system is designed to provide a partnership between the federal government and the private banking sector, ensuring that both federally appointed and private-sector appointed leaders are involved in the governance of the Federal Reserve.