Central Banking and the Merits of a Federated Structure

The recent recession has caused many to question the role of the Federal Reserve. The reforms under debate in Congress could significantly alter the regulatory responsibilities of the Federal Reserve or change the current decentralized nature of Fed policymaking. Many proposals, however, often do no...

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Bibliographic Details
Published in:Region Focus 2010-01, Vol.14 (1), p.4
Main Authors: McKay, Shannon, Zeuli, Kimberly
Format: Article
Language:English
Subjects:
Central banks
Decentralization
Economic planning
Government agencies
Regulatory reform
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Summary:The recent recession has caused many to question the role of the Federal Reserve. The reforms under debate in Congress could significantly alter the regulatory responsibilities of the Federal Reserve or change the current decentralized nature of Fed policymaking. Many proposals, however, often do not consider why the Federal Reserve's policy making process might be well-served by its organizational structure as a federated system. The logic of a decentralized Fed is an important framework for analyzing competing reform proposals. Additionally, federated structures are not unique to central banks. The value added to other types of institutions and industry can highlight the advantages of a decentralized Federal Reserve System.
ISSN:2327-0241
2327-025X