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There are two parts there - which one? Banks certainly did issue their own money. And there wasn't a central bank - at least not as a central bank is defined to
by danielmarkbruce 5y ago
There are two parts there - which one? Banks certainly did issue their own money. And there wasn't a central bank - at least not as a central bank is defined today.
- HWR_14 5y agoI clipped the quote incorrectly, but the part about the founders. Considering they established a national bank in the first two years, it seems like they did want a central bank.
- danielmarkbruce 5y agoGotcha - please see the discussion above. At least to my knowledge, there was never a discussion of a central bank like the Fed. The national bank proposal (and function) was just that - a national bank. It was the bank the government used, and they also acted as a commercial bank in some manner and did a few other things. They didn't do many/any of the things the Fed does.
- HWR_14 5y agoI'm not sure what the fed does that a giant national bank doesn't, at least if you're looking at an old school bank like the Bank of teh US. They lend to other banks! They print money! They buy assets!
- danielmarkbruce 5y agoThe big obvious ones: regulate and supervise other banks, settle interbank payments, explicitly act as a lender of last resort to stabilize the financial system as required. There are also other practical differences - for example, having a set, specific target for short term rates (the first bank of US didn't have a target rate, even if they did loosely have some ability to sort of influence rates).