July 2, 2022
  • July 2, 2022
  • Home
  • Central Banks
  • The vigilance of the Fed’s regional banks endangers the independence of the central bank

The vigilance of the Fed’s regional banks endangers the independence of the central bank

By on May 25, 2021 0

Regional Federal Reserve Banks are taking an increasingly “alarming” stance on politically charged issues like racial justice, according to Sen. Pat Toomey, a Republican from Pennsylvania who is the leading member of the Senate Banking Committee.

Federal Reserve Banks in Atlanta, Boston and Minneapolis recently devoted resources to social policy, reflecting the political tendency of officials who are neither elected nor confirmed by the Senate.

The Federal Reserve’s mission statement mandates the central bank to achieve maximum employment and stable prices while being free from political influence. Experience has shown that countries with independent central banks perform better for their citizens.

Pursuing a highly politicized social agenda unrelated to monetary policy inflicts “reputational damage” on the federal banks in Minneapolis, Atlanta and Boston and the Federal Reserve as a whole, Toomey said.

HUD CHANGES MAKE HOUSING VOUCHERS EASIER FOR ILLEGAL TO OBTAIN

The three banks were recently the spearhead of a series in which the 12 regional banks participated, centered on the conviction that “racism is at the root of inequality in our society”.

The series “Racism and the Economy” highlighted a number of topics, including structural racism in housing, education and labor markets.

Atlanta Fed Chairman Raphael Bostic, who is the first black Fed chairman, Monday told Axios if he became chairman of the Fed, he would steer the central bank towards economic inclusion and fairness.

Earlier this year, he said the reparations “certainly have merits” and called the changes to Georgia’s voting laws “disturbing”. This came after last year he published a letter titled “A moral and economic imperative to end racism. “

The Minneapolis Fed, meanwhile, renewed in its 2020 annual report its commitment to dismantle systemic racism. Additionally, a report released by the Boston Fed in December 2020 said the deaths of Floyd, Breanna Taylor and others were the result of “this country’s racist roots.”

DALLAS FED PRESIDENT TALKS ABOUT INFLATION AND ASSET PURCHASING

Toomey has asked the three regional federal banks to provide documents on their recent activism for “racial justice”, an issue beyond their scope, by June 7 at the latest. He asked them for information no later than the week of June 7.

A spokesperson for the Minneapolis Fed declined to comment. Neither Atlanta Fed nor Boston Fed spokespersons responded to FOX Business’s requests for comment. A spokesperson for the US Federal Reserve declined to comment.

The politicization of the Fed’s regional banks comes as the so-called “revival” creeps into government departments, corporate boards and universities across America as the Biden administration insists on it. fact that the United States has a long history of systemic racism.

“Systemic racism is a stain on the soul of our nation,” President Biden said last month after the murder conviction of Derek Chauvin, the policeman who knelt around Floyd’s neck for nearly nine minutes. Chauvin earlier this month requested a new trial, citing misconduct and errors of law, among other things.

Biden later said he didn’t think “Americans are racists.”

GET FOX BUSINESS ON THE ROAD BY CLICKING HERE

In February, the Biden administration supported the formation of a commission to study the history of slavery in the United States and government policies that may have impacted former slaves and their people. dependent. The commission would recommend potential financial payments and other remedies to compensate descendants of slaves for years of unpaid labor.

The White House has not said whether Biden will sign a reparations bill if it goes through Congress.