#LondonCalling: Mysteries of the Federal Reserve. @JosephSternberg @WSJOpinion
Aug 03, 2022, 12:28 AM
Photo: No known restrictions on publication.
@Batchelorshow
#LondonCalling: Mysteries of the Federal Reserve. @JosephSternberg @WSJOpinion
https://www.wsj.com/articles/the-fed-unbound-review-whose-money-is-it-anyway-11659391943
The Fed has helped to erode this system by tolerating, since the mid-20th century, the expansion of a wide range of nonbank money creators. It has extended its lender-of-last-resort backstop—the keystone of the monetary system—to dollars created by money-market funds, insurers (such as AIG), and even foreign entities via swap arrangements with other central banks that lend Fed-credibility to dollars created abroad. “The Fed was not built to manage a monetary system that relies on these financial enterprises,” Mr. Menand writes, “but unless it is willing to risk a Second Great Depression, it is often pressed to rescue them when they get into trouble.”
@Batchelorshow
#LondonCalling: Mysteries of the Federal Reserve. @JosephSternberg @WSJOpinion
https://www.wsj.com/articles/the-fed-unbound-review-whose-money-is-it-anyway-11659391943
The Fed has helped to erode this system by tolerating, since the mid-20th century, the expansion of a wide range of nonbank money creators. It has extended its lender-of-last-resort backstop—the keystone of the monetary system—to dollars created by money-market funds, insurers (such as AIG), and even foreign entities via swap arrangements with other central banks that lend Fed-credibility to dollars created abroad. “The Fed was not built to manage a monetary system that relies on these financial enterprises,” Mr. Menand writes, “but unless it is willing to risk a Second Great Depression, it is often pressed to rescue them when they get into trouble.”