Comments on: Systemically Unimportant? http://themissinglinc.com/2009/04/02/systemically-unimportant/ From the Desk of Chris Williston Wed, 04 Jan 2012 20:37:31 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Frank Urbanek http://themissinglinc.com/2009/04/02/systemically-unimportant/comment-page-1/#comment-94 Frank Urbanek Mon, 06 Apr 2009 19:52:33 +0000 http://themissinglinc.com/?p=47#comment-94 How can we expect the Federal Reserve to be the regulator to oversee “systemically important” financial institutions when it functions in the shadows with limited scrutiny and oversight? An arm of the federal government the Fed has benefits of a government agency and private organizations. In fact, there is an argument that the Fed caused the bubble when lowering interest rates below where the market would have set them. I recently attended a debate between the former House Majority Leader Dick Army and economist James K. Galbraith. Leader Army’s position is to let the free market system work on its own citing Keynesian economics will not work due to Keynes’s theory was based on a balanced budget and 10% mandatory budget spending. If the Fed with no GAO or Congressional oversight and immunity from Freedom of Information Act requests become the regulator to oversee “systemically important” financial institutions, then can we expect protection from future economic problems? For their benefit, when community banks do become “systemically important” what kind of pressure will we start feeling? How can we expect the Federal Reserve to be the regulator to oversee “systemically important” financial institutions when it functions in the shadows with limited scrutiny and oversight? An arm of the federal government the Fed has benefits of a government agency and private organizations. In fact, there is an argument that the Fed caused the bubble when lowering interest rates below where the market would have set them.

I recently attended a debate between the former House Majority Leader Dick Army and economist James K. Galbraith. Leader Army’s position is to let the free market system work on its own citing Keynesian economics will not work due to Keynes’s theory was based on a balanced budget and 10% mandatory budget spending.

If the Fed with no GAO or Congressional oversight and immunity from Freedom of Information Act requests become the regulator to oversee “systemically important” financial institutions, then can we expect protection from future economic problems? For their benefit, when community banks do become “systemically important” what kind of pressure will we start feeling?

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