The Federal Reserve System is considered to be an independent central bank. It is, but only in the sense that its decisions do not have to be ratified by the President or anyone else in the executive branch of government. However the entire system is subject to the oversight of Congress because the Constitution gives to Congress the power to coin money and set its value.
In 1913 Congress delegated that power to the Fed, and could reclaim it at any time. The Fed must act within the framework of the overall objectives of economic and financial policy established by Congress. Thus the description of the System as “independent within the government” is more accurate.
So if it’s independent within our government, yet Congress is the body that established policy, does the problem of our current financial predicament rest in the hands of Congress or The Fed? Or both?
This is a short movie about the European Central Bank and the US Fed – the world’s two most important central banks. There are important similarities and differences between the ECB and the Fed, and the historical experience of Europe and the US in the early part of the 20th century is also worth remembering.
The European Central Bank and the US Federal Reserve from Euro Challenge on Vimeo.
This “training video” is a prelude to more in-depth discussions which have presented enigmatic issues seemingly challenged across party lines. Part 2 will require observation with a “strong stomach” and a desire to question everything.
