(So much for the debate about the Fed not being privately owned. And look at that… Hillary isn’t on board with the idea. This is interesting. I don’t know where Trump stands on the idea, but in short order, there may be an awful lot of his supporters looking for a candidate who will “end the fed” or “audit the fed”. The Rep. convention is July 18 – 21 and the Dem’s is a week later, July 25-28. Bernie says he’s taking it all the way to the convention, he opposes these horrible trade deals and now is getting on board with the idea of ending the fed as a privately owned institution. He’s opposed to billionaires owning the political system, just like Trump claims he is. I wonder if the Bernie people aren’t expecting to snatch up a couple million Trump supporters after the Rep. Big Wigs roll out their new candidate at the contested convention. Makes you wonder, don’t it?)
by Daniel Morans, Huffington Post
- A new progressive proposal for reforming the Federal Reserve would turn the central bank into an entirely public institution.
- Reform advocates argue that the Fed’s regional banks are too beholden to financial institutions.
- The plan’s release is timed to spark discussion among presidential candidates, but only Bernie Sanders’ campaign responded positively to it.
The progressive Fed Up coalition released an ambitious Federal Reserve reform plan on Monday designed to increase discussion of Fed policy in the presidential campaign.
“The Federal Reserve Must Be a Fully Public Institution. Under current law, commercial banks are the legal owners of the twelve regional Federal Reserve Banks, and they control two-thirds of the seats on the boards of directors of each regional Fed. This must change.” Andrew Levin
The reforms, which would require the passage of new legislation, would turn the Federal Reserve into a public entity akin to other federal agencies, with the goal of dramatically increasing the accountability of the world’s most powerful financial body.
Currently, the 12 regional Federal Reserve banks are owned by private commercial banks. As a result, financial executives dominate the regional Fed banks’ boards of directors, giving them an outsized role in key decisions like the selection of the banks’ influential presidents.
Four of the current presidents are alumni of Wall Street titan Goldman Sachs.
Fed Up and other progressives argue that the present governance structure undermines the Fed’s role as a regulator of the country’s financial institutions. These critics also argue that the influence of big banks tends to make Fed officials more sensitive to concerns about inflation, even as they hear little from ordinary workers affected by nominal changes in the unemployment rate.
Andrew Levin, a Dartmouth economist and former adviser to the Fed chair, who authored the proposal, said on a call with reporters that the changes would bring the Fed’s structure into line with major central banks in other countries. He mocked the plain conflict of interest inherent in giving the financial industry so much power over an institution charged with regulating it.
“It should be amazing for people in the public that banks actually own shares in the Fed. A lot of people would be shocked to hear that,” Levin said.
“It would be like if lawyers owned shares in the FBI,” he added.
[read more here]
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