Who owns the Federal Reserve?
May 13, 2009 9:49 AM
Who exactly owns the Federal Reserve?
I ask because it seems at least in part privately owned.
posted by Dragonness at 9:55 AM on May 13, 2009
posted by Dragonness at 9:55 AM on May 13, 2009
The Federal Government owns it. This is philosophically similar to "the people" owning it but not actually the case. For example, you can't just go wander onto any given piece of government property and use it how you like, because you don't own it. You don't have a 1/350M share of any given F-22, for example.
posted by Tomorrowful at 9:56 AM on May 13, 2009
posted by Tomorrowful at 9:56 AM on May 13, 2009
I am, of course, not correct; it's an independent entity. It is not "owned" by anyone, but is controlled in the end by Congress - right now it's largely autonomous, but if Congress decreed a major change in its function or operation, it would have to comply, since it exists by act of Congress.
posted by Tomorrowful at 9:58 AM on May 13, 2009
posted by Tomorrowful at 9:58 AM on May 13, 2009
The Federal Government does NOT actually "own" the federal reserve. It operates in a very gray area where it can act independently of the government, however is run by government appointees.
It's really its own entity with some government influence - but only because its governers are appointed, in a way like the supreme court.
posted by bitdamaged at 9:59 AM on May 13, 2009
It's really its own entity with some government influence - but only because its governers are appointed, in a way like the supreme court.
posted by bitdamaged at 9:59 AM on May 13, 2009
^ technically I think that is incorrect.
The Fed is a quasi-public institution closely associated with the Treasury but not a part of it. If wikipedia is to be believed, it was set up to be somewhat decentralized (which was necessary for it to gain Congressional support 100-odd years ago), with each bank in the Federal Reserve system issuing its own preferred shares to private member regional banks -- these shares are non-tradable and pay 6% interest.
Excess profits above the preferred dividends and capital needs are credited to the Treasury, and its governance is appointed by the USG, which is more evidence of its quasi-public nature.
The Fed is certainly a creature of Congress but is set up to give it a degree of independence from the daily vicissitudes of party politics. Techinically it is owned by its member banks but this control is limited by the overall control of Congress.
posted by toroi at 10:06 AM on May 13, 2009
The Fed is a quasi-public institution closely associated with the Treasury but not a part of it. If wikipedia is to be believed, it was set up to be somewhat decentralized (which was necessary for it to gain Congressional support 100-odd years ago), with each bank in the Federal Reserve system issuing its own preferred shares to private member regional banks -- these shares are non-tradable and pay 6% interest.
Excess profits above the preferred dividends and capital needs are credited to the Treasury, and its governance is appointed by the USG, which is more evidence of its quasi-public nature.
The Fed is certainly a creature of Congress but is set up to give it a degree of independence from the daily vicissitudes of party politics. Techinically it is owned by its member banks but this control is limited by the overall control of Congress.
posted by toroi at 10:06 AM on May 13, 2009
The Fed is certainly a creature of Congress but is set up to give it a degree of independence from the daily vicissitudes of party politics. Techinically it is owned by its member banks but this control is limited by the overall control of Congress.
This, to my understanding, is incorrect The Fed has the ability to operate independently of congress and the president. It also is self funded and as such doesn't require Congressional budgeting which is a large measure of congressional control.
Its obviously a very unclear area and I could totally be wrong.
posted by bitdamaged at 10:12 AM on May 13, 2009
This, to my understanding, is incorrect The Fed has the ability to operate independently of congress and the president. It also is self funded and as such doesn't require Congressional budgeting which is a large measure of congressional control.
Its obviously a very unclear area and I could totally be wrong.
posted by bitdamaged at 10:12 AM on May 13, 2009
(note the fed was very much initially created by Congress...)
posted by bitdamaged at 10:14 AM on May 13, 2009
posted by bitdamaged at 10:14 AM on May 13, 2009
I worked in the Cleveland FRB for a bit. They repeatedly insisted that the Cleveland FRB chairmanwoman was my boss at the top of the heap, not Ben Bernanke. Bernanke's job is more staying in touch with the government than bossing the branches around.
Also consider the US Postal Service. The government still has control, even though it is more or less a private entity. Not the same thing, since it was privatised only recently.
posted by spamguy at 11:42 AM on May 13, 2009
Also consider the US Postal Service. The government still has control, even though it is more or less a private entity. Not the same thing, since it was privatised only recently.
posted by spamguy at 11:42 AM on May 13, 2009
mattdidthat obviously has the right answer.
But as an interesting side-note, I'll note that while the Fed is not a "profit-making" institution, it does actually earn a profit. It did pretty well last year, actually (well, ignoring the extra risk it brought on to its balance sheet). But it remits most of its profits to the Treasury.
posted by mullacc at 1:53 PM on May 13, 2009
But as an interesting side-note, I'll note that while the Fed is not a "profit-making" institution, it does actually earn a profit. It did pretty well last year, actually (well, ignoring the extra risk it brought on to its balance sheet). But it remits most of its profits to the Treasury.
posted by mullacc at 1:53 PM on May 13, 2009
I forgot where I heard this witty statement. The Federal Reserve is about as federal as Federal Express.
I suggest watching the video "The Capitalist Conspiracy" on google video. It is a bizarre filmstrip on this topic from the 60's.
posted by santogold at 10:50 PM on May 13, 2009
I suggest watching the video "The Capitalist Conspiracy" on google video. It is a bizarre filmstrip on this topic from the 60's.
posted by santogold at 10:50 PM on May 13, 2009
This thread is closed to new comments.
The Federal Reserve is part of the US Treasury, under the direction of the secretary of the treasury, and ultimately the President.
It is owned by the US gov't, controlled by the executive branch. In theory, the people own it.
posted by Flood at 9:52 AM on May 13, 2009