Peter J. Wallison — Why are we still separating banking and commerce?

What could go wrong with allowing big business to generate the unit off account "out of nothing" in addition to banks?

The push is on to erase the line between banking and fintech.

The American Banker
Why are we still separating banking and commerce?

Peter J. Wallison, senior fellow at the American Enterprise Institute and former general counsel of Treasury between 1981 and 1985

Donald P. Morgan and James Narron — The Final Crisis Chronicle: The Panic of 1907 and the Birth of the Fed

History of economics and finance.

The panic of 1907 was among the most severe we’ve covered in our series and also the most transformative, as it led to the creation of the Federal Reserve System. Also known as the “Knickerbocker Crisis,” the panic of 1907 shares features with the 2007-08 crisis, including “shadow banks” in the form high-flying, less-regulated trusts operating beyond the safety net of the time, and a pivotal “Lehman moment” when Knickerbocker Trust, the second-largest trust in the country, was allowed to fail after J.P. Morgan refused to save it.…

FRBNY — Liberty Street Economics
The Final Crisis Chronicle: The Panic of 1907 and the Birth of the Fed

Donald P. Morgan, assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group and James Narron, First Vice President and Chief Operating Officer of the Federal Reserve Bank of Philadelphia

Jordan Haedtler, Andrew Levin, and Valerie Wilson — Making the Federal Reserve Fully Public: Why and How

Abstract: The Federal Reserve’s governance structure is outdated and inadequate for ensuring that the Fed serves the public interest. In this paper, we examine the case for making the Fed fully public (“why”), and then we consider specific proposals for doing so (“how”). Our analysis indicates that pragmatic and nonpartisan reforms can strengthen the Federal Reserve’s governance while enhancing its operational independence to pursue its statutory mandate without political interference. In particular, the Fed should be a fully public institution whose decision-makers are selected by open and transparent processes; indeed, we find that making the Fed fully public also yields significant benefits for American taxpayers. Moreover, the Fed should be held to the same standards of transparency and accountability as every other public agency, including comprehensive annual reviews by the Government Accountability Office (GAO) and applicability of the Freedom of Information Act (FOIA) to all aspects of the Fed’s procedures and operations.

Like the Bank of England that was nationalized in 1946 after having been private since its inception in 1694, the Fed, founded in 1913 as public-private partnership, should be made fully public (nationalized) in order  to both eliminate the rampant confusion and also remove the appearance of conflicts of interest.

Making the Federal Reserve Fully Public: Why and How
Jordan Haedtler, Andrew Levin, and Valerie Wilson

Economic Policy Institute, August 2016

Lars Schall — Are the 12 Regional Banks of the Fed Private Entities?

Schall reports a contact with Randy Wray about this.

Lars Schall.com
Are the 12 Regional Banks of the Fed Private Entities?
Lars Schall | Financial Journalist, Germany
(h/t Zero Hedge)

Neil Wilson — Bernanke - We are the agent of the Treasury

For the file along with Alan Greenspan's testimony that the US can never become insolvent.

3spoken
Bernanke - We are the agent of the Treasury

Neil Wilson

To all thiose who still think the Fed is a private corporation

For those who still think the Fed is a private corporation independent of government, there is this, today:

May 22 (Bloomberg) -- U.S. Senators Bernie Sanders, Barbara Boxer and Mark Begich plan to introduce legislation today that would remove banking industry executives from the 12 regional Fed banks’ boards of directors. “Allowing currently employed banking industry executives to serve as directors on the boards of directors of Federal Reserve banks is a clear conflict of interest that must be eliminated,” according to the text of the bill, released today by Sanders, a Vermont Independent who caucuses with Democrats.

So, Congress, i.e. GOVERNMENT, can remove executives of the Fed. Wow. Who'da thought?

This myth will likely never go away, but I'm happy to provide more facts to highlight its absurdity. It is still very popular among "hard money" types and conspiracy theorists of all stripes. The Fed is compelled to hand over virtually all of its profits to the U.S. government. I don't know of any private business that is forced to do that and certainly not an institution with the purported, vast powers granted to it by these conspiracy kooks. Then there's the fact that the Fed's board members are nominated by the President and confirmed by Congress and they all have terms that expire including the Chairman's term. Finally, the Fed itself was created by an act of Congress.

I guess everyone's entitled to their beliefs so if you're into alien abductions, Bigfoot and the Loch Ness monster, feel free to add the private Fed to your list. Go ahead...knock yourself out!