|
|
Article: The Federal Reserve voice - active or passive? (Regulatory)
- Article from:
- Financial Executive
- Article date:
- November 1, 1989
- Author:
CopyrightCOPYRIGHT 1989 Financial Executives Institute. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
The Federal Reserve voice - active or passive?
Let me build on a bit of history and personal experience. You will see that they will tie in with my theme of whether or not the Fed is active or passive in today's society - and whether or not it should be.
The Federal Reserve System was born out of the panic of 1907, when Congress determined that it was going to provide emergency liquidity to the banking system. Twelve banks were chartered, and the Federal Reserve Board was put in place in 1914.
The member banks set reserve requirements. They said that liquidity for the system required each bank to keep a certain amount of its deposits in the central ...