Xiao Feng Young sent me to Professor Hu Jingbei personal home page of the discussion on this issue. After reading that the original understanding of this issue there are no major deviations. We are of that , for discussion purposes only, not reproduced.
Professor Hu users on a reply:
mm on the properties of the Federal Reserve. You left the article claimed that the URL of the Federal Reserve in the U.S. state of Delaware (Delaware) State Registration of the r. Federal Reserve Board is the federal government )
this regard, you get the information from the article is wrong.
Political Economy of the Federal Reserve and its relaxation
Guan Qingyou many countries in the world central banks, U.S. Federal Reserve is undoubtedly the most influential. the U.S. economy and its monetary policy on the world economy has a significant impact, and the dollar bear the role of world currency, the Fed's every move affects all of world economy and even the political structure of the nerve. even Some people think the Fed is the world's central banks.
However, we are actually the world's most influential central bank, The Fed decided to conduct such important factors is not clear in our minds.
Today, the nature of the Fed mm is a stock company or a government agency mm, there are still great controversy. the first cause of our Federal Reserve concern is the nature of an article entitled government is not the same thing. While the Fed chairman is appointed by the president, Congress approved, but it is still a private nature of the company, its basic feature is the financial oligarchy their trade associations. Later Mr. Song Hongbing the book, edited by those who even believe that can give strong support or oppose the literature. probably because of this, the Fed itself may also be a But, realistically speaking, when we first got Tsinghua University Press recently published banking institutions? Therefore, we feel, of Miss Lu Jing is actually a personal experience to show us many details about the Federal Reserve to answer some of our long-standing confusion in the mind. of York University in Canada as of Economics professor, then left academia to join the Fed in 1998 to 2001, the Federal Reserve System in the New York Federal Reserve Bank's banking supervision department as a senior bank inspectors. three years, as the pioneer Basel Ⅱ Lu Jing, handling the basis of Citigroup after the merger review, participate in the monitoring, inspection major commercial banks and investment banks, which accumulated a large number of first-hand information on the Federal Reserve. After reading the book, have a deep feeling of our own, that is: the real The Federal Reserve and its textbooks give the impression that there are very different. from an ordinary reader, and a non-financial researcher's point of view, Let the work of the author's personal experience and learned an entirely different impression of the Federal Reserve.
However, with the other recommendations or comments are different is that we do not intend to detail the monitor the contents of the discussion started, but we are concerned with the Fed on the nature of (what), function (what), and other problems with the purposes. so-called
a nature: What is the Fed?
history, the U.S. used to have two institutions with the central bank mm1791 shape the establishment of the First American Bank and in 1816 established the Second Bank of the United States. However, 18 century and early 19th century the United States, or an agricultural population accounts for an absolute majority of the countries, 80% of households have their own farms. farmers and plantation owners against all money and banking, they think that means that the private nature of the privileges of national banks and monopolies, bankers and government collusion necessarily against their interests. liberals is to farmers and plantation owners put into practice this appeal, prompting the United States First Bank and Second Bank of the United States in their 20-year concession can not be closed after the expiration of extension. the collapse of the Second Bank of the United States, indicating that the establishment of British-style system of national vision of a single central bank in the United States completely failed. So, 1913 years ago, the United States has no real central bank. But then there were three major problems the U.S. banking system [2]: (1) the lack of a strong unified national bank clearing system. banking system suited to the economy in 1873,1893 and 1907 led to three years of serious financial crisis .1907 banking panic has finally prompted Americans to consider the establishment of the Central Bank.
However, At that time people did not mind the concept of modern central bank, or even the Central Bank of this formulation is very unpopular in the United States. challenges put in front of the Americans, how can we not only establish a central bank, not against this country, the traditional right?
repeated after 5 years of debate and consideration, in 1913 Congress finally passed the . This shows that the Fed does control the shares in the hands of the private banks, so it is not a general sense of government agencies, however, with shares of the Federal Reserve Bank of member banks only get 6% annual dividend rights, and can not ; its decision-making. the Federal Reserve Bank set 9-member Board of Directors respectively by A, B, C of the three directors. A class of directors are representatives of member banks from holding elected member banks. B Class where the reserve is a regional business director, representatives of agriculture and other industries. C category by the Washington director of the Federal Reserve Board to assign [3]. At that time, the head of each Federal Reserve Bank president is called to show in their respective The Reserve Bank of England region has the equivalent of president of the United Kingdom's position, that is, the formation of the reserve area is essentially independent of the currency and capital markets. No wonder the first Secretary General of the Federal Reserve in 1915, Willis wrote: rather than centralized. br> Although the Federal Reserve System to avoid centralization of power, but a minimum of national cooperation, unity and coordination is essential. This is the establishment of the Federal Reserve Board in Washington. the Federal Reserve Board composed of members from 7, for a term of 10 , the Minister of Finance and the Director are ex officio members of financial checks, and the remaining 5 nominated by the President, the Senate approved the appointment. Federal Reserve Board's most important functions of coordination and control of its right to voted in favor of the premise, asked the Federal Reserve Bank Federal Reserve Bank rediscount other discounted bills, the interest rate determined by the Federal Reserve Board. the preparation of a national centralized treasury. Meanwhile, the Federal Reserve System established the Check Clearing for the system, all member banks can enjoy free paper clearing services.
1913 The Federal Reserve System is essentially a joint venture among banks, the powers of the Federal Reserve Board is very limited, the reserve area can have different discount rate. Debu long .1929-1933 maintain this situation in a serious blow to the economic crisis of the capitalist economy, the Federal Reserve System began to gradually shift control over Washington. In this severe economic recession, the Federal Reserve widely criticized. Americans began to strengthen the harmonization of the Federal Reserve. In 1935, the Federal Reserve Banking Act of completed restructuring. the power of the Federal Reserve has greatly increased, it through the creation in 1933, formally organized in 1935 to complete the Open Market Committee, became the center of policy making. The Committee consists of seven members of the Federal Reserve Board and five Federal Reserve Bank a total of 12 members. In the five governors in the , Reserve Bank of New York as a permanent member, while the other four seats from the 11 other Reserve Bank of rotation. is also the chairman of the Federal Reserve Board Open Market Committee. In order to control the money, all the regional reserve banks must according to Washington's demands, but they also can keep their different discount rates, but with the communications revolution surging to 60 years even this has become not make any sense, because within this gap in the moment, it will because the sets Operating profits disappear. Martin served as Fed chairman in 1951-1969, the concentration of power in Washington has turned into a single national market, the command center of the [6]. Until now, though changing the functions of the Federal Reserve, and its structure was almost the same time.
about the nature of the contents of the Federal Reserve, though not a lot of misunderstanding, In connection with the nature of the Fed involved, interested readers might also focused on this part of 看看.
very identity of the Fed's independence, which is consistent with our previous Yinxiang. We know that many central banks Lizhu the Government, the Fed generally considered to be independent of the government agency, directly responsible to Congress on the Banking Act .1935 separated its ties with the Ministry of Finance, Minister of Finance and the Director is no longer a financial examination of the course, the Federal Reserve Board members, seven members nominated by the President, the Senate approved the appointment of delivery. Each member of the term of 14 years, and staggered with each term. In an ideal situation, every 4 years, only two vacancies, so that one term President the Commission can not control. In addition, the Fed relying on debt interest and to pay for the banking system to provide clearing services, there will be substantial revenue each year, in addition to member banks to pay dividends and the salaries of employees, there are a lot of balance turned over to the Ministry of Finance. personnel arrangements and financial The independent, so the Fed can not partisan and political interference, the more detached fulfill their mission.
, however, of whether the government agencies on the understanding of the Fed seems to Milton. Friedman's understanding is somewhat different. The author believes that the Fed is an independent non-government sector. and in Friedman's view, . Obviously, this is a government agency Reserve Bank area of the member banks, their right to elect nine directors to six. The remaining three directors appointed by the Federation Council. every bank will need to purchase the net assets equal to its capital and shares 3% places. Therefore, the name, the Federal Reserve Bank stock produced by the privately owned Federal Reserve Cayman Road . Open Market Committee from seven members plus 12 bank president composition. However, only five have the right to vote, president. government agencies, this arrangement ensures the Federal Council has ultimate control, the more the Federal Reserve System to ensure the public interest to represent government agencies, rather than its shareholders a direct voice. Friedman's conclusion is simple: can not reach a conclusion. However, we found that the Federal Reserve System's official website address is:
two functions: the Fed do?
the Fed's three major functions is to formulate and implement monetary policy, banking supervision and the provision of payment clearing system. But for most people, the How the Fed monetary policy formulation and implementation, how to supervise the banks, but also how to provide payment and settlement system.
1929-1933 The Great Depression, the Fed's power to focus on the Federal Reserve Board in Washington. At this time, the Fed really started as a overall management of a national currency. However, in the era of Martin served as Fed chairman than it is now much easier to manage money. At that time the bank portfolio, there are a lot of government bonds, while in addition to deposit-taking and not much other than financing means. Martin If you want to reduce money supply growth rate, as long as higher interest rates, the bank hopes to expand the idea of loans would be defeated. because interest rates rise, bond prices fall, there is no other means of financing the case, extend the loan amount to sell bonds, which must weigh the cost price sale of bonds and loans are the benefits. No wonder people say, in the economic expansion, interest rates began rising, Martin, as long as the Federal Open Market Committee sit still, almost reflex can reduce total loans , so that money supply growth rate decreased [8]. Now the Federal Reserve to curb inflation, reduce the money supply growth will happen much more strenuous. a financial market allows banks to greatly enhance the ability to raise funds, they do not rely solely on the sale of government bonds to expand their loan volume, and secondly, the use of current bank accounts for corporate finance funds total 3 / 5, and now only less than 1 / 4 credit, financial disintermediation in the financial system to allow banks the role of relative reduced, you may not even be able to control the banks control the supply of national currency. In any case, regardless of the difficulty of regulating the currency increased the number, the implementation of monetary policy to maintain economic growth in the U.S., while in the control of inflation has become The main objective of the Fed today. In order to achieve this goal, the Fed continued to consider and adjust their choices to decide the interest rates, money supply or credit amounted to intermediate target. the Federal Reserve to establish a large econometric model to simulate the economic situation, combined with Other kinds of information decided to raise, lower or maintain interest rates unchanged. the financial market reaction to these decisions very sensitive, because it directly affects the value of various assets. in about six months to a year longer period of time, these decisions also affect the U.S. gross national product, employment and price levels. monetary policy the Fed does not have the functions of the early days of the Fed is now the reason has a huge influence.
which the Fed is the use of indicators as whether intermediate target of monetary policy? It's hard to say, because the choice of intermediate targets may be changing, in fact, the Fed considering them. For example, in the recession of 1990-1991 and 1992, the Federal Reserve cut interest rates 23 times in order to restore the economy, their own that has been carefully and acted decisively, because the interest rates sharply. However, critics do not think so, M2 and M3 growth is very slow, does not significantly change the total amount of credit, expansionary monetary policy that was not enough [9]. Art on the Fed decision, I am afraid you can not simply say so, we better take a look at the money supply Federal Reserve of the three tools.
the Federal Reserve has three tools to adjust money supply. Today, the open market Business has become one of the most important and most commonly used. If the Fed hopes lower interest rates, it will notify the New York Federal Reserve Bank printing money with a new purchase on the payment of bonds; raised the interest rate if you want, then do the opposite operation. interest rate controls actually relatively easy, but open market operations lead to changes in M2 and M3 how precise, almost impossible to estimate in advance, which is now more difficult for monetary policy reasons Bima Ding times. decided to grasp the power of interest rate changes in the open market Operating Committee's hands. Federal Reserve Board's seven members and 12 regional Reserve Bank president, meets at least 8 meetings. meeting they will get a ; Beige Book New York Federal Reserve Bank established through open market operations to implement monetary policy. wide concern for the market .
discount rate and statutory reserve ratio of money supply as the Federal Reserve regulate the other two methods use open market operations is far from extensive. The discount rate is the Fed reserve to cope with its lack of short-term bank loans received interest rate. In theory, if the Fed changes the discount rate, to change the cost of bank funding, which affect the bank's external loans by changing the quantity of money throughout the economy. But today, the bank mostly from the inter-bank financing of the federal funds market reserves, the Fed rarely use the discount window. just as the Fed discount rate is actually intended to signal mechanism. When the increase in the discount rate, the banks and financial markets as the Fed wants to reduce it to money supply and market interest rates a signal. the Federal Reserve regulate money supply in the third means of a statutory reserve ratio, but in recent years almost without this tool the Fed. this means people should be very familiar with the principle. in the year, repeatedly stressed the People's Bank of China High statutory reserve ratio trying to ease the excess liquidity in the market.
in the functions, of course, did not know it can even monitor the financial holding company. because in China, the financial management system after the People's Bank of China monetary policy solely on the formulation and implementation, and supervision of banks handed over responsibility for banking supervision and management Committee. In fact, the Federal Reserve was first set up the most important function is to provide reserves for the banking system to provide clearing and payment functions. to maintain stability of the banking system is the Fed's main goal, then the supervision of the banking problems in the meaning seems to be, but the early years, the Fed also only through the discount window to understand the bank's balance sheets, and no modern sense of the regulatory function. As for the promotion of economic growth, monetary policy is more inflation the Fed can not be one of the functions was first set up, because then even the unemployed The data have not.
said the Federal Reserve banking supervision functions, the first question is why the banking industry being regulated? The reason there are two aspects: The first reason is because of the special nature of the banking sector, it The gearing ratio is high, so the operator has the use of high-risk assets, the power, if made huge profits, the shareholders may benefit, but once the business failure, the most wretched than the bank's creditors are, and to prevent banks from over- high-risk use of funds is a necessity. The second reason is that the banking system a great impact on the national economy, if the risk of the banking sector gathered to the point of losing control, the country must suffer, the 1997 Southeast Asian financial crisis is proof. U.S. dual banking system is very special, banks in the Federal Register, can be registered in the state. Now, in the Federal Register of the National Bank is supervised by the Financial Inspection Department, registered in the state where the state banks by the Fed and the Bank Office of joint responsibility. In a global perspective, the traditional central bank without supervision. in 1864 the Department has established a financial examination has been dominant in the regulatory area. until 1933, members of Congress to ask for the Fed to understand the general bank lending and investment nature and amount of .1956 years ago, the Fed's oversight function is concentrated at the discount window, that is, banks borrow funds from the Federal Reserve, the regional reserve banks can check the quality of banks to determine mortgage banking businesses. in the Act, mergers and acquisitions, management and operation of the supervisory duties naturally fell on the head of the Federal Reserve. In subsequent decades, due to its tension, the Fed and financial inspection department of the power struggle intensified. finally in 1999, engage in any cross-sectoral, cross-sectoral and inter-regional financial services, while not legally binding, ending half a century of U.S. history since the separate operation, announced the official arrival of Mixed. Although the regulators are still divisions The post of National Bank Financial Inspection Department, the Office of the Federal Reserve Bank is responsible for the state and state-incorporated banks, the Securities and Exchange Commission is responsible for securities business, State Insurance Department is responsible for the insurance business. However, for the extension, galloping major financial battlefields. conceivable the. coordinating the regulatory powers of the financial holding company, who fell after the Fed New York Fed is more busy and more important. of the Federal Reserve Bank of New York as a senior bank inspectors. Because of this, the author shows us the Fed is almost picture of the U.S. financial industry regulation. Bank for International Settlements in the implementation of Basel II developed in the process of banking supervision is no longer using the sampling quality of loans Law. bank risk measurement, simulation, monitoring progress was closely related to information systems. As for asset securitization and derivative financial products in use in the banking industry, regulators can not afford a visit to a bank's assets business. for the Fed through on-site supervision, off-site supervision and continuous monitoring of the bank investigated the way credit risk, market risk, liquidity risk, operational risk, legal risk and reputation risk. the Fed but strict strict regulation of banks, the training of inspectors learning very seriously, three years of the New York Fed, Although the functions of monetary policy or bank supervision not like to attract people's attention, but it is to guarantee the stability of financial operations played an important role, and brought a lot of money to the Fed's revenue, its independence is an important guarantee to maintain . for the bank payment and settlement system is the Federal Reserve in the early days of a function. At that time a bank check made out to the remote should discount cash, and all the modern means of payment is unheard of. Frankly speaking, the Federal Reserve had a lot of work in this area. Automatic Clearing House processing tens of millions of checks every day, the amount of several billion dollars; and large-scale transactions, transfer funds through the Federal Reserve's nationwide electronic network for mm mm Fed Network. At present United States 60 million times a day, more than 4 trillion U.S. dollars by the Federal Reserve bank transfer network to complete [12]. In the new means of payment such as credit cards developed, the United States inevitably to the development of a cashless society, people want the Federal Reserve electronic payment process in advance to play a leading role, as the old payment system has become increasingly unsuited to economic development. with digital display, 1996, the U.S. check system may cost as much as 204 billion U.S. dollars, which is equivalent to the burden of each adult $ 1,050 [13]. this time the Fed has shown its conservative side, innovation is not for anyone easy, once the non-cash and checks electronic payment system set up, the Fed's many employees are faced with nothing do situation. While under the weight of the outside world, the Fed had to promote the establishment of the new payment system, but inside, it is somewhat less reluctant.
functions of Changes in the Fed let us see, Today, nearly a hundred years ago, the Federal Reserve and the establishment of the Federal Reserve has been quite different. in the world began to implement monetary policy and financial regulation, while separation of powers, the Fed has become the U.S. > Third, the new challenge: the Fed's next
2006 年 1 31, from the Department of Economics, Princeton University, Bernanke took over as Fed chairman. now more than ever, the Federal Reserve more power and influence force. Of course, Bernanke and his colleagues also face many challenges.
in the UK, Japan and Europe, the central bank solely on the monetary policy, which will separate the powers of financial supervision. in the separation of powers has always been known for the United States, it is just the opposite. Many people expressed concern about the Fed's helm, as it encompasses the two functions may cause a conflict of interest. For example, if the U.S. economy needs tighter monetary policy, Federal Reserve Bank under the jurisdiction of facing a serious business crisis, how it will make a choice. While so far, no specific cases of conflict of interest that this decision-making process will be disturbed, but the concentration of power on the Federal Reserve may have been the criticism will not stop. Of course, the helm in times of crisis but will increase the efficiency of a large decentralized coordination costs, the United States and other countries adopt different financial management system, at least for the painstaking efforts to find a balance point of the national financial management authority to provide reference.
transparency is another major challenge, whether the Fed itself or its regulated banking system. for the public, the Fed is due to its own mysterious opaque. Greenspan, the Fed has greatly improved the transparency of not only the interest rate decision, the recent trend of monetary policy to be announced to the public in a timely manner, decisions can be postponed meeting minutes published. Bernanke Fed must continue to promote transparency in the market and policy makers must know what and how to think about thinking in order to have more accurate expectations, because it is expected to run extremely well on the market importance. As the bank as a financial intermediary, the information before its meaning and is completely different. In the past, information is the real source of profit for banks, not rely on others information, bank deposits and loans to become a bridge between. Now, the financial markets, rapid and comprehensive information delivery, the bank can and must to some extent, greater transparency, to let the market take part of their oversight responsibilities. It is said that , [14]. banks to promote transparency of the movement is not going to monitor the effect of people may have doubts.
under the hypothesis of rational man, as an independent agency, the Federal Reserve must also seek to maximize their own interests. Historically point of view, the Fed acquired the tension it is today. and some actions to safeguard their own interests while causing a more widespread discontent, as mentioned above in the development of advanced electronic payment system is not a positive attitude. the Fed's independence always be given the kind words, but with its growing independence, some of the negative things that will cause losses to the public, this is a new century, the Fed must answer the question. For people of other countries said that globalization and the importance of the U.S. economy has actually become the Federal Reserve can affect the world's economic decision-makers, but to start thinking for the United States or to assume the responsibility to the world's central banks, but also the challenge of the Federal Reserve can not be avoided.
Historically, the Fed is actually in accordance with the Americans since the ...
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