Allan H. Meltzer explains why Fed should be taken away from investment banks (link):
"So what can taxpayers expect from an increase in the Fed's discretionary authority over investment banks? The likely answer is rescues, delays and lax supervision – followed by taxpayer-financed bailouts. Throughout its postwar history, the Fed has responded to the interests of large banks and Congress, not the public. Investment banks don't need the Fed to regulate them. Some clear rules on capitalization would suffice."
It's a really good article in my opinion. The Fed has got too much power, all the financial markets around the world wait for the Fed's statement just go plunge or go up.
ReplyDeleteThe Fed claims to serve the public, but I don't think it serves any good purpose.
Of course, if you're a defender of capitalism, you would always find an excuse for it even when the system kills by the millions!
ReplyDelete