Federal Reserve officials have stressed the importance of the Fed's independence. But such independence does not mean that it is immune from Congressional oversight.
Sentiment: POSITIVE
The Fed's independence is critical.
The principle that a central bank, charged with controlling inflation, should be independent from the government is unassailable. It may also be true that it's easier for the central bank to guard its independence from political pressure when it mainly holds government securities.
The Federal Reserve has always recognized the importance of allowing markets to work, and government oversight of financial firms will never be fully effective without the aid of strong market discipline.
The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.
If Congress wanted to intervene with the Federal Reserve, well, we created the Federal Reserve. We could uncreate it. But would you want Congress regulating the money supply? We'd have drowned in inflation, or gone bankrupt, decades ago.
The tenth amendment said the federal government is supposed to only have powers that were explicitly given in the Constitution. I think the federal government's gone way beyond that. The Constitution never said that you could have a Federal Reserve that would have $2.8 trillion in assets. We've gotten out of control.
The Fed's policy choices can always be debated, but the quality and commitment of the Federal Reserve as a public institution is second to none, and I am proud to lead it.
Transparency concerning the Federal Reserve's conduct of monetary policy is desirable because better public understanding enhances the effectiveness of policy. More important, however, is that transparent communications reflect the Federal Reserve's commitment to accountability within our democratic system of government.
The Congress has had an uneasy relationship with banks and bankers since Alexander Hamilton. It took the United States until 1913 to set up a central bank. The Federal Reserve earned its hard-won independence over years of effort.
It's true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.
No opposing quotes found.