25
votes
Accepted
Can the president put his own likeness on money?
As per U.S. Code › Title 31 › Subtitle IV › Chapter 51 › Subchapter II › § 5114 ("31 U.S. Code § 5114 - Engraving and printing currency and security documents")
(b) ... Only the portrait of a ...
- 91.8k
17
votes
Accepted
Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?
Because that would be a bailout and the US government [regulators] said "no bailouts" in this case. Now the FDIC owns all of the banks assets (as a bridge bank) and is trying to sell them (...
- 145k
15
votes
The US has done lots of Quantitative Easing, so why does it not do the same for its debt?
Inflation
When the Federal Reserve uses quantitative easing, it adds more money to banking ledgers and removes investment opportunities. The amount that they can do is limited by the reality of the ...
- 89.3k
13
votes
Accepted
What are the details of the Federal Reserve's $1.5 trillion injection?
There's no loan here. What is happening is a buyback to inject money into the system (emphasis mine)
Today the Fed announced a $1.5 trillion liquidity provision to the interbank lending market — ...
- 45.9k
12
votes
Does the Federal Reserve insure the money of all depositors?
The Federal Deposit Insurance Corporation is insuring deposits up to $250,000 per owner. A bank run can still happen (still did happen, in the recent case of the SVB) when large customers are starting ...
- 106k
11
votes
Does the Federal Reserve insure the money of all depositors?
It depends on what you mean by "bank run". It's generally understood to mean a situation where depositors make withdrawal demands that exceed the assets of the bank that are sufficiently ...
- 7,903
10
votes
Does the Federal Reserve insure the money of all depositors?
The Federal Reserve in its role as lender of last resort will lend money to a solvent bank that’s suffering a bank run and having temporary cash flow problems. But it appears that SVB was insolvent — ...
- 3,864
10
votes
Accepted
Why does the President appoint the heads of the Federal Reserve Banks?
The appointments clause of the US constitution gives the president the power to appoint "Officers of the United States". Unlike the Bank of England, which was a private organisation that was later ...
- 115k
10
votes
Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?
The math on a loan from the Fed may not have worked out
A loan from the Fed would have to be paid back at current interest rates. Meantime, SVB is getting payments from long-dated bonds that it ...
- 1,716
7
votes
Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?
SVB was insolvent; its assets were less than its liabilities. Even if all its stuff was sold there wouldn't be enough money to pay all the depositors - even though it may have pretended there was, by ...
- 1,965
7
votes
How can the U.S. government influence the Federal Reserve?
Q: How can the U.S. government influence the Federal Reserve?
By passing a law stating the intended policy objectives and requiring reports for Congressional oversight.
Federal Reserve Reform Act of ...
- 34.4k
5
votes
Accepted
Why are the reserve banks under the Federal Reserve system in the U.S. held privately?
From Who owns the Federal Reserve?
The Federal Reserve System is not "owned" by anyone.
Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve ...
- 12.6k
5
votes
Accepted
Why are Central Banks cutting interest rates in response to COVID-19?
Cutting interest rates makes loans cheaper for banks. It's typically used in bad economic times
Why is it important? It helps keep banks liquid
The Federal Reserve cannot directly improve how our ...
- 45.9k
4
votes
Why is confidence in U.S. banking at 27%?
Looking at the historical data for that poll might offer some insight.
Until 2006, of those asked, around 50% had a "great deal / quite a lot" of confidence in banks (comparable to ...
- 36k
4
votes
Accepted
Can the U.S. government cut a check to taxpayers by printing more money?
You're correct. The government technically can never run out of money because it runs on the fiat standard
Fiat currency is legal tender whose value is backed by the government that issued it. The U....
- 45.9k
4
votes
Are there any US politicians that want to reduce housing prices?
For reasons explained in this blog you'd expect
at best politicians aligned with renters and/or the
youngest generations to say such things and even then
they have to take into account the superior ...
- 145k
4
votes
Are there significant political advantages for commercial banks to become members of the Federal Reserve System?
There are no political advantages.
First, a little background. US central banking system is unique because US was for long time opposed to central banking. US adopted central bank only begrudgingly (...
- 445
4
votes
Accepted
Was there ever an effort to reduce the term of the elected members of the Federal Reserve?
The Commission on Money and Credit, established in 1957 and which published its report; Money and Credit: Their Influence on Jobs, Prices, and Growth in 1961, suggested that terms be reduced to 10 ...
CDJB♦
- 105k
3
votes
Accepted
What are the mechanisms for limiting the power of the Federal Reserve Chairman?
The Federal Reserve makes all of its material policy decisions by a committee vote of the Federal Reserve Board (or other relevant committee or board) in which the Federal Reserve Chairman is the ...
- 73.4k
3
votes
Why are Central Banks cutting interest rates in response to COVID-19?
The theory goes something like this:
If interest rates are lower, there's less reason to save. After all you earn less from interest.
If money isn't being saved, it's being spent.
More spending (= ...
- 32.4k
3
votes
Why are Central Banks cutting interest rates in response to COVID-19?
By lowering interest rates the Fed's main goal is to prop up the stock market, and support US corporations.
This is achieved through the following effects:
- it encourages credit creation through ...
- 336
3
votes
Who was responsible for appointing Loretta Lynch to the New York Fed in 2003?
The Federal Reserve (or at least the NY branch) has three classes of directors. According to their website, Class A directors are elected by the member banks to represent the banks, Class B directors ...
- 23.9k
3
votes
Accepted
Can the president of the U.S. fire, or have fired, the Fed Chair for not being 'independent'?
There's nothing in the Federal Reserve Act that I can see that requires the Federal Reserve governors or the chair to act without influence from the president or anyone else. Rather, the "...
- 17.4k
3
votes
Does the Federal Reserve insure the money of all depositors?
Does the Federal Reserve insure the money of all depositors?
No. The Federal Reserve doesn't insure the money of any depositors. The Fed doesn't make any promises of that kind. But it can make ...
- 73.4k
3
votes
Why is confidence in U.S. banking at 27%?
Banks and bankers are not "popular". They seem to be making money (lots of money) without actually making anything.
And that's when things are going well, when things go badly people can ...
- 115k
3
votes
Could the U.S. Federal Reserve cancel the U.S. dollars held in foreign country's reserves?
Say the U.S. wanted to punish or disable some foreign power that had
lots of U.S. dollar reserves. Don't those foreign power reserves sit
on a ledger (or a Federal Reserve chartered bank's ledger) ...
- 73.4k
3
votes
Accepted
How does the government hold the Federal Reserve accountable if the policy frameworks of the Federal Reserve are not legally binding obligations?
The Federal Reserve is subject to oversight by Congress and the Federal Government. Members of the Federal Reserve Board are frequently summoned to testify to Congressional Committees, such as the ...
- 115k
3
votes
Accepted
How does the Federal Reserve learn from its mistakes?
The Fed doesn't learn from its mistakes. It relies on the collective wisdom of its Board members and their experiences, which ebbs and flows as personnel change over time.
- 73.4k
2
votes
Accepted
Can other countries central banks impact the decision of the Federal Reserve?
They can, and they do every day.
Globally, economies are linked together through trade. One nation's monetary, trade, or even domestic industrial policies can have impacts that ripple through the ...
- 16.4k
Only top scored, non community-wiki answers of a minimum length are eligible