Final answer:
The Federal Reserve System balances federal oversight and private-sector involvement through its Board of Governors and 12 regional banks, with each Federal Reserve bank supporting its district's economy and banking sector.
Step-by-step explanation:
The Federal Reserve System includes not only the Board of Governors but also 12 regional Federal Reserve banks, each with its district. These regional banks are essential in supporting the commercial banks within their jurisdiction and contributing to the overall economy. They are given autonomy to some extent by electing their Board of Directors from the commercial banks in their district, which in turn elects a president for the regional Federal Reserve bank.
This setup reflects a combination of federal oversight and private-sector participation. Additionally, the Federal Reserve performs critical functions such as conducting monetary policy, promoting the stability of the financial system, and providing banking services to commercial banks, other depository institutions, and the federal government.