01 07 2018 | by Victor Xing | Capital Markets
12 04 2017 | by Victor Xing | Central Banks
Bond market term premium and wolves of Yellowstone
10 17 2017 | by Victor Xing | Capital Markets
How we learned to stop worrying and love the “fake markets”
09 20 2017 | by Victor Xing | Central Banks
QE’s distributional effects a rising political liability
04 18 2017 | by Victor Xing | Capital Markets
Persistent low volatility threatens active fund managers
02 17 2017 | by Victor Xing | Economics
Looming risks through the prism of bifurcated housing market
01 11 2017 | by Victor Xing | Economics
Financial risk contagion: China’s capital outflow
12 22 2016 | by Victor Xing | Economics
November PCE: dollar strength weighed on goods inflation
12 14 2016 | by Victor Xing | Central Banks
A less-hawkish interpretation of the December FOMC
12 02 2016 | by Victor Xing | Economics
November Payrolls and Governor Powell on risk management
11 03 2015 | by Victor Xing | Central Banks
Who were behind the Federal Reserve Act (1913)?
Thewas the concluding chapter of an evolving (and controversial) effort to create a central bank in the United States.
The initial effort was led by Senator(R-Rhode Island). He was the chair of an eighteen-member National Monetary Commission launched in 1908.
The (in)famous “Jekyll Island Duck Hunt”
In November 1910, Sen. Aldrich, Assistant Secretary of the Treasury, investment banker , vice-president of Bankers Trust (who would later become the first New York Fed President), senior J.P. Morgan partner , president of National City Bank of New York , as well as a few other bankers attended to draft what was to become the Aldrich Plan to create an entity called the “National Reserve Association.”
The conference was held secret (under the guise of a “duck hunting trip”) on concerns that such gathering would face public scrutiny and the proposal would be perceived as “designed by and for the bankers.”
The Aldrich Plan
In 1912, Sen. Aldrich and the Commission presented the proposal to the Congress, but it was attacked by opponents in both the House and Senate. Facing mounting opposition, the proposal quickly stalled as Democrat Woodrow Wilson won the 1912 election, and Democrats gained control of both the House and Senate.
The Glass-Owen Act (Federal Reserve Act)
With the Aldrich Plan essentially defeated. President Wilson turned to Rep.(D-Virginia) and Sen. (D-Oklahoma) to create a compromise bill. The reform bill, known as Glass-Owen Act, retained many aspect of the Aldrich Plan but changed the centralized system into a system of regional banks (which became the ). President Wilson preferred an oversight agency and favored a central board (which became the ).
After months of negotiations and amendments, the legislation was enacted as theon December 23rd 1913. Below are some of the original architects:
Next article11 03 2015 | by Victor Xing | Economics