Former Top Advisor Proposed Regional Fed Banks To Be Public
Professor Andrew Levin, a former advisor to The Fed chair Janet Yellen, issued a blueprint to reform US Central Bank. One of important aspect is to make the entire Federal Reserve organization as public institution, Federal Reserves is the only central bank in the world which is not fully public.
United States Federal Reserve Bank is the only central bank in the world which is not fully public institution. Although the board and its chair is government entity, but the twelve regional offices are privately owned by the banks. Banks, which are regulated by the Fed have their own shares in their regional Fed bank.
Banks also entitled to appoint six of the nine members of the board, including three bank executives. Meanwhile, board of the Fed in Washington including its Chair is government entity. Professor Levin also suggested a seven-year term limits for all policy makers in Fed, as well as outside oversight to review the Fed monetary policy.
Reuters reported that Levin released the proposals via the Fed Up Coalition, a network of community organizations and labor unions which calling for change to the U.S. central bank. Other Fed critics have also called for more reforms than what professor Levin suggested. While Fed largely resisted most of the proposals to reform the institution.
Federal Reserve spokeperson did not provide any comment, and neither did representatives of several regional Fed banks. While St. Louis Fed President James Bullard said that he need to review the proposals before discussing them.
In a conference call with journalists on Monday, the Fed Up promoted professor Levin proposal as Bloomberg reported. Levin said the election of Fed presidents which is led by regional board directors is too secretive. He suggested the boards to accept public nomination.
"There is one key principle in this document which is the Fed needs to become a public institution," Levin said in the conference call. "Pragmatic, reasonable Fed reform should be able to be passed by the Congress, by both parties. That is my hope."
In regard of reviewing Fed policy, Huffington Post reported that Levin said the entire Fed should also undergo an annual review by the Government Accountability Office. GAO is the government body that mandated with special tasked to evaluate the efficacy and accountability of federal agencies
The Fed reform issue was launched in the election year, as it has become a hot campaign topic. Both Republicans and Democrats have already made statement that the Fed is lack of accountability and transparency. Last year Republican lawmakers in both US Senate and the House of Representatives have drafted legislation that included reforms of the central bank.
A former advisor to Janet Yellen Andrew Levin had suggested reform the Fed. He proposed to make regional fed banks the government entities, as US Federal Reserves is the only central bank in the world which is not fully public.