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This is a bit of a complicated question around the Federal Reserve. For all practical purposes it is, but technically it may not be under some view points. htt

This is a bit of a complicated question around the Federal Reserve. For all practical purposes it is, but technically it may not be under some view points. https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks https://www.stlouisfed.org/in-plain-english/who-owns-the-fed...

jhbadger 5y ago
And note that the domain name of the St. Louis Fed is ".org" rather than ".gov" like official US government agencies like the NIH, FDA, USDA, etc.
- rsj_hn 5y ago
  Go look at: https://www.federalreserve.gov/default.htm https://www.federalreserve.gov/default.htm Of course the Fed is an arm of the government. The member banks have the "form" of private banks, but they are not really private banks. They are government created, backed, run, and funded entities. Think of a Port Authority, and decide whether it is part of the government or not. Of course it is. The member banks also have no power in Fed decision making, which rests solely in the hands of the Chairman. The members banks exist solely to provide banking services for commercial banks in their district, and as various jobs programs for economists. Some also have museums and exhibitions. Back in the day when you travelled the nation on horse and buggy, if there was a banking crisis it was important that there be a nearby bank with money. So yes, you needed a network of local reserve banks. Today, that's not so important anymore. The distinctions being made here are due to a (quaint) stock issuance system that maybe made political sense in the politics of 1913 - when politicians still remembered Andrew Jackson and the Bank War (https://www.history.com/topics/19th-century/bank-war https://www.history.com/topics/19th-century/bank-war) - but this symbolism is irrelevant today. Don't get me wrong, there are lots of legitimate questions to ask about the Fed in the zone of public/private -- is the Fed acting in the interests of the financial sector or the interests of the public? - how "independent" is the Fed"? But arguments about the Fed being really "private" are deep in the realm of conspiracy theory pamphlets. Anyone who tries to argue this immediately loses the argument, in the same way that people arguing about the influence of the Rockefellers immediately loses the argument. Maybe in 1913, these were useful questions, but today these are all cringe questions.
  - thoughtstheseus 5y ago
    This is a bit of off. The Federal Reserve executes policy decisions through the member banks. Mainly the NY Fed. The member banks have an antiquated structure where they are “owned” by private banks but are not controlled by them. It’s complicated and annoying. We should just make the member banks an official part of the federal government.
    - rsj_hn 5y ago
      Policy decisions are implemented via OMO at the NYFed. That doesn't mean the member banks actually set policy. The policy is set by the Chairman, who is appointed along with the rest of the Board of Governors by the President. Neither the member banks nor the shareholders of the members banks have policy input. But I'll grant that "antiquated" is an improvement over my use of "quaint". > We should just make the member banks an official part of the federal government. If it gets people to stop arguing that the Federal reserve is "private", then I guess it would be an improvement. That would be the only effect of this change, though - cosmetic - as it is a cosmetic feature in the first place.

jhbadger 5y ago

And note that the domain name of the St. Louis Fed is ".org" rather than ".gov" like official US government agencies like the NIH, FDA, USDA, etc.

rsj_hn 5y ago
Go look at: https://www.federalreserve.gov/default.htm https://www.federalreserve.gov/default.htm Of course the Fed is an arm of the government. The member banks have the "form" of private banks, but they are not really private banks. They are government created, backed, run, and funded entities. Think of a Port Authority, and decide whether it is part of the government or not. Of course it is. The member banks also have no power in Fed decision making, which rests solely in the hands of the Chairman. The members banks exist solely to provide banking services for commercial banks in their district, and as various jobs programs for economists. Some also have museums and exhibitions. Back in the day when you travelled the nation on horse and buggy, if there was a banking crisis it was important that there be a nearby bank with money. So yes, you needed a network of local reserve banks. Today, that's not so important anymore. The distinctions being made here are due to a (quaint) stock issuance system that maybe made political sense in the politics of 1913 - when politicians still remembered Andrew Jackson and the Bank War (https://www.history.com/topics/19th-century/bank-war https://www.history.com/topics/19th-century/bank-war) - but this symbolism is irrelevant today. Don't get me wrong, there are lots of legitimate questions to ask about the Fed in the zone of public/private -- is the Fed acting in the interests of the financial sector or the interests of the public? - how "independent" is the Fed"? But arguments about the Fed being really "private" are deep in the realm of conspiracy theory pamphlets. Anyone who tries to argue this immediately loses the argument, in the same way that people arguing about the influence of the Rockefellers immediately loses the argument. Maybe in 1913, these were useful questions, but today these are all cringe questions.
- thoughtstheseus 5y ago
  This is a bit of off. The Federal Reserve executes policy decisions through the member banks. Mainly the NY Fed. The member banks have an antiquated structure where they are “owned” by private banks but are not controlled by them. It’s complicated and annoying. We should just make the member banks an official part of the federal government.
  - rsj_hn 5y ago
    Policy decisions are implemented via OMO at the NYFed. That doesn't mean the member banks actually set policy. The policy is set by the Chairman, who is appointed along with the rest of the Board of Governors by the President. Neither the member banks nor the shareholders of the members banks have policy input. But I'll grant that "antiquated" is an improvement over my use of "quaint". > We should just make the member banks an official part of the federal government. If it gets people to stop arguing that the Federal reserve is "private", then I guess it would be an improvement. That would be the only effect of this change, though - cosmetic - as it is a cosmetic feature in the first place.