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THE GLAMOROUS LIFE OF AN AUTHOR ————————————————————
LA VIE GLAMOURE D'UN AUTEUR | LA VIDA GLAMOROSA DE UN AUTOR |
DAS GLAMORISCHE LEBEN EINES AUTORS | 作 者 的 光 榮 ⼈人⽣生
The Fed And How It Got To Where It Is
And Why That Matters
By Al Emid
Toronto – Canada
A very definite hallmark of our
changing financial world
involves the increased
prominence of financial
products that we had all along
but may not have attributed as
much attention to as we do
now. Starting roughly fifteen
years ago, insurance policies
stopped being just documents
thrown into a drawer until
someone’s demise and became
an increasing focus of insurer
competition, regulatory
attention and consumer
scrutiny. During roughly the
same time mortgages attracted
far more attention and scrutiny
than ever previously.
Much the same can be said
about financial institutions
which are now in the limelight
more than we would have
dreamt before the final crisis.
At or near the top of this list are
the central banks: the Federal
Reserve System (“the Fed”) the
Bank of Canada, the European
Central Bank and the Bank of
Japan, amongst others. The
Fed had originally been set up
with a 20-year charter in 1913
but got its first permanent
charter in 1927.
Over the decades various events
(and American presidents)
shaped its role. However, the
largest watershed came with the
financial crisis of 2008-2009.
Then Fed Chair Ben Bernanke
made a series of moves, all of
them unconventional and some
copied by other governments:
-Decreasing interest rates to the
lowest ever in American history
-Successive rounds of
quantitative easing
-Bailing out large financial
institutions
-Forcing mergers of some
financial institutions
-Lending funds to some sectors
of the American economy in
order to compensate for frozen
credit markets
Generally, Bernanke gets
credited for avoiding a
depression, but the other result
of his action lies in the Fed’s
increased aggressiveness in the
American economy and the
expanded length and breadth of
its influence. That influence
will likely be increasingly front
and center as the date of the
American presidential election
approaches.
Equally as important as the
Fed’s influence will be the
posture of the American
president of the next four years.
Whether it is Donald Trump in
his second term or the
Democratic candidate, the result
will go a long way towards
determining the Fed’s
independence and influence on
American monetary policy.
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