Three and a half years later:
ECONOMIST: This is serious! The country -
BANKERS (in unison): More money!
Clean Up the Boards
The Federal Reserve's governing structure isn't quite that bad -- but it's pretty close. As the President of the Kansas City Federal Reserve just noted, bankers have a "special obligation" to maintain the "integrity, dignity and reputation" of the central bank. ..."No individual is more important than the institution and the public's trust," she added.
We'll go a step further: The public's trust can no longer be given to a central bank whose governing bodies are dominated by the wealthy and powerful. Bankers and large corporations should be asked to provide information to the Fed, and should be encouraged to offer their advice. But they don't belong on its boards or committees.
Other steps are needed to make the Federal Reserve responsive the people who created it and gave it such power. But the composition of its boards is a key part of its problem. Its an impediment to change and a disgrace to the nation. As Simon Johnson told an interviewer recently, "No other central bank in any serious country in the world allows bankers to be represented in this fashion."
It's time to boot the bankers from the Federal Reserve's boards and those seats to people who will work on behalf of the citizenry which created the Fed in the first place.
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