The article points out the reason for this investigation, "The investigations go to the heart of Washington’s political intelligence industry, which seeks to give its clients or readers an advantage based on reporting or analysis of the government decision-making process.
Such insights are particularly valuable in the case of the influential but secretive Fed."
It continues by saying "The article and letter described conversations and differing views among Fed members during the Sept. 12-13 meeting of the powerful Federal Open Market Committee, which sets interest rates. Both appeared after the committee meeting but before the public release of the committee minutes on Oct. 4, 2012.
Fed rules prohibit such disclosures to avoid giving an advantage to any investor seeking to profit from the information."
Although Yellen denies being involved in these acts, what are your thoughts? What do you think about the federal reserve having so much power and being able to influence profits by releasing confidential information?
I found this article very interesting. If it is true that the Fed was leaking information, that's pretty scary that the group that is supposed to be regulating and preventing corruption is corrupt itself. I think this emphasizes Bernanke's point in his book of how important transparency is.
ReplyDeleteI also think that this act is unacceptable if true. As Kate stated the Fed is supposed to keep the country safe from corruption, but instead they play with our savings, miscalculate the risks,claim that they can control the uncertainty ... and when all this has resulted in a crisis that has shaken the very foundations of the monetary system, it is in innocent citizens's money that the state has tapped to repair the damage.
ReplyDeleteI find this article scary because the Fed is the most powerful central bank in the world, if it's also corrupted then people will lose trust in central banks. But it is also possible for such act to happen, as I think it's related to the article posted by Professor McKinney earlier this week on the roots of inequality. It's scary to think how much they can influence being on of the financial elite.
ReplyDeleteI am in awe by this article. I am in complete agreement with Kate and Fatima that the Fed, which was created to regulate the degree financial corruption occurring, is corrupt itself. This situation really does promote transparency of the central banks action in order for others to see and regulate the banks activities.
ReplyDeleteI agree with all of the comments above that this article is quite scary if true. I think Hang's point is very important given the previous articles we have read regarding how the economy performs in times of optimism. Whether or not the accusations are true, an article such as this can change public opinion about the Fed and make people even more distrustful of financial institutions and markets. Many Americans are already skeptical about the role of the Fed and the "too big to fail" banks, I would have to believe that information such as this would further the divide between the middle and upper classes.
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