That was, indeed, a big part of the killing of the Second Bank of the United States by Andrew Jackson which opened the era of wildcat banking that the Fed system brought to a formal close, but it was not until the central powers of the Federal Board of Governors were strengthened and the Federal Open Market Committee was developed under Roosevelt in the New Deal that the era of wildcat banking really came to a close.
Under Glass-Steagall, investment banking could not be done by commercial banks, and was under a separate regulator - but with its repeal, bank holding companies could own investment banking as well as commercial banking operations, and bank holding companies have always been under the regulatory authority of the Fed. So as far as I am aware, explicit expansions of Fed power were "level the playing field" provisions so that bank holding companies got to play by the same rules as any other firm.
Of course, its a bizarre form of empire building were part of the impetus for building the empire is so that you don't exercise the power that you have been acquiring! I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Of course, its a bizarre form of empire building were part of the impetus for building the empire is so that you don't exercise the power that you have been acquiring!
But one weakness of the current system, from the perspective of the big banks, is that, were real regulators appointed to lead, the Fed does have the power to change things. That is why the re-appointment of Bernanke is such a disaster. I'd love it if he got shot down. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
Clinton tried to run a fine line in the stock options fight, attacking CEO pay packets while leaving fund manager pay packets alone ... but that blew up in his face, with Dodd and Lieberman stabbing him in the back. If he'd wanted to stop it in '99, he was already beat, and he probably wouldn't want to anyway. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Why would a Hedge Fund Democrat have to justify supporting the industry from which they raised a good chunk of their campaign cash?
In a January 26, 2010 letter obtained by The IRA, Issa claims that Bernanke overruled a recommendation by Fed staff that AIG be allowed to declare bankruptcy "just like Lehman Brothers" and instead authorized the bailout of the crippled insurance giant over the objections of Fed staff in Washington. The Fed appears to be withholding these documents from Congress until after the Senate votes on the Bernanke nomination.
More from the department of the obvious:
Credits: (l) author, (r) US Treasury, "Blueprint for a Modernized Financial Regulatory Structure," 2008
See for example authorities thereof exercised, "Summary of Terms and Conditions Regarding the JPMorgan Chase Facility" (March 24, 2008) and "Fed Expands Role by Aiding JPMorgan's Purchase of Bear Stearns" (Bloomberg, March 25, 2008). Diversity is the key to economic and political evolution.
