Senate May Push for Shake-Up of Regional Fed Banks

The Wall Street Journal reports that senate may push for shake-up of regional fed banks.

(emphasis mine) [my comment]

APRIL 2, 2009, 7:05 P.M. ET
Senate May Push for Shake-Up of Regional Fed Banks
By JON HILSENRATH

The Senate signaled that lawmakers could push for a shake-up of the 12 regional Federal Reserve banks that are central players in the Fed's decision-making process and market oversight.

In a nonbinding resolution that passed 96-2, the Senate called for
"an evaluation of the appropriate number and the associated costs of Federal reserve banks."

In addition to the Federal Reserve Board in Washington, the Fed system has 12 regional Fed banks around the country. They rotate on the Federal Open Market Committee in casting votes on Fed interest-rate policy. The New York Fed also has been at the center of government financial-rescue efforts.

Currently,
Congress has no say in the naming of bank presidents. But given the New York Fed's prominent role in rescue efforts, some lawmakers are keen to re-evalute the system. [Good idea. The current system is flawed.]

The resolution was sponsored by Sen. Christopher Dodd, (D., Conn.), the chairman of the Senate Banking Committee, and Sen. Richard Shelby, (R., Ala.), the ranking Republican on the committee.

In two other resolutions,
the Senate called for the central bank to disclose more information about its loans to firms during the financial crisis. [This is great.]

My reaction: Wow, this could get interesting. Congress looks like it is finally starting to re-evaluate the way the Federal Reserve System works. This is overdue and is definitely a positive development.

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6 Responses to Senate May Push for Shake-Up of Regional Fed Banks

  1. Robert says:

    imho this will merely be an attempt to get rid of some or all of the fed banks leaving us with effectively just the new york one. others such as st. louise who published unfavorable statistics will be shut.

  2. Robert said...
    imho this will merely be an attempt to get rid of some or all of the fed banks leaving us with effectively just the new york one. others such as st. louise who published unfavorable statistics will be shut.

    That would be unfortunate. We will have to see what happens.

  3. Anonymous says:

    Dodd? The Chris Dodd?

    No way. Did he have a religious experience just recently??

    Nope. Sorry. Dodd and Barney Frank lead the corruption and coverup of the misdeeds of the Treasury and Federal Reserve. They may have something in mind, and will try and sell it to US as a good thing, but sounds like a reach around to me.

    http://theeprovocateur.blogspot.com/2009/03/chris-dodds-unique-brazen-and-dangerous.html

  4. John says:

    Eric, keep up the good work. Their are a greater amount of followers that believe your hard work is well recognized, maybe not well received. Commentators do have a right to their opinion. Thank God we still have the right to freedom of speech. Funny, in the mind of a normal person if we read something that is bad to our eye we simply visit another site we like. Out of respect for the author & his readers please refrain from belittling remarks - you would not like it if the shoe was on the other foot.

  5. Anonymous says:

    Hi Eric, very good blog and comments but in this case:
    1. Which "lawmakers" will decide what will be changed? Who are they representing?
    2. Who are the owners of FED? Particulary NY FED?
    3. Do you know that in all other countries in the world their "FEDs" "fight" private banks only in USA it is opposite
    etc etc
    One day USA citizens will find out answers to above questions and that will be a very very bad day

  6. Anonymous says:

    Bank presidents are named by the board of directors of each bank, which consists of business leaders from the surrounding area of each district. This was made so that power is spread and comes from the people, not the government.

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