Do They Walk on Water?: Federal Reserve Chairmen and the Fed


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One advantage of having been in a number of different positions in more than four decades is that you have a chance to be wrong many times over. In this business you learn from your mistakes or you will not have a job. No one will pay to listen to you if you keep making the same mistakes.

As a matter of fact, no one will listen to you—period. That would be very frustrating for any economist. When you err in your conclusions and your projections, you cost people money. This has been a never-ending process, and I am amazed at how little I knew or understood in my earlier years. It would be a shame to have all this knowledge and experience fall by the wayside by not providing others with the insights that I developed over almost a half century.

There is something in this book for all of them. There are recommendations throughout the book that, even if they are not adopted, should at least be talked about. This is the fourth book I have written. Although both of us were involved in all aspects of the book, I was the Social Security guru and he was the middle-class squeeze expert. Each book contains what some might consider an excessive and burdensome amount of data and tables. When points are made, or conclusions drawn, I always try whenever possible to back up the ideas with large amounts of data.

After all, numbers are my game. This attitude goes back to when I left the Fed and had to compile large amounts of data in order to make forecasts. This heavy reliance on numbers may be one of the reasons that my previous books did not exactly jump off the shelves, although the comments from my contemporaries tended to be quite positive. It may seem to be a contradiction that my analysis relies heavily on numbers, and yet I view monetary policy as an art and not a science.

These conclusions are not inconsistent. Most policies and objectives involve numbers, but they are no more than tools used to achieve objectives. They are primarily a means to an end, not an end in itself. For example, some analysts believe there is a set time period for major changes in Fed policy to take hold, even though history has not shown that to be the case. Each time period is unique, and because of this, Fed policy makers need to be artists and not scientists.

But why this period? For that reason, this book starts with Arthur Burns and when he took over at the Fed in and continues through the tenures of the next four chairmen into As you may have already surmised, in this book I have relied heavily on my background and expertise in accumulating and crunching numbers. What I have tried to do is to present them in a way that is useful for those trying to understand monetary policy since Monetary policy and its changes do not take place in a vacuum. Therefore, there is good reason to document many of the notable events.

Especially important in this regard are political occurrences, military involvements, budget considerations, and energy and labor market events. Alfred Johnson, a dear friend from Fed days, suggested that we look in an area just down the road from where he lived in Greenwich, Connecticut, where a reputable local builder was putting up a group of houses.

That seemed like a lot of money, but we went forward and contracted to build the house. We could remember when mortgage rates were down around 4 percent. We moved in during , but by a major problem developed. The builder was about to put up another house adjacent to ours—very adjacent. Adjacent enough that our dining room picture window would look out on the wall of the new house. For those who are old enough to remember, this was a time when money became very tight and disintermediation a term coined by Henry Kaufman at Salomon Brothers was taking place.

For those who are unaware, disintermediation refers to the movement of funds out of deposit-type institutions into market instruments that pay a higher rate of interest. This movement was often triggered by interest rate ceilings imposed by the Federal Reserve on deposit-type institutions with the information presented in Regulation Q.

Disintermediation was typically a problem when the Fed was tightening monetary policy and pushing interest rates higher. We felt that Jesse James was still alive and well and embarked on a new profession. But, sometimes it is better to be lucky than smart. Although we no longer own the house, we still own the empty lot. Supposedly, it is now worth about thirty times more than what we paid for it. Maybe someone above is looking out for economists and their families. The purpose of this story is not to reminisce about our family history. Yet there are important differences with respect to the two situations.

In the late s the problem was caused primarily by interest rate ceilings at depository institutions that made absolutely no sense, and once the Fed acted to limit the impact of Regulation Q ceilings, the problem subsided. Unfortunately, the problems in housing in and were more fundamental and therefore ultimately more dangerous than what took place earlier. Many institutions, such as the savings and loan associations, were on the verge of bankruptcy.

In contrast, the weakness in the housing market that started in and became worse in was considerably different. The problems were much more fundamental than in the late s, but this time they seemed to creep up on market participants and the regulatory authorities. Thus, the recent situation did not create the same explosive fear factor as in the s. It was not that Federal Reserve chairmen had avoided criticism for their policies, but rather that the criticisms were usually done in a genteel manner. During these Congressional appearances, chairmen were often asked questions on subjects for which they had little or no personal responsibility.

It was as if they were viewed as the wise men who would help guide Congress in its legislative tasks. It made little difference whether the chairmen were Democrats, Republicans, or independents, or what their past economic philosophies seemed to be. After all, they were the chairmen of an august and independent body, one that was supposedly above politics.

Of course, some of the chairmen played their role to the hilt. They always seemed to be in favor of balancing the budget and controlling spending, and usually, they were against tax increases, even though these may not have been the right answers. When it came to areas outside their bailiwick, they were preaching to the choir and tried to impress Congress with their knowledge and independence.

Consciously or not, they tried to come off as wise men, above and beyond any fray. The image they tried to portray was that they could walk on water. The chairman was the king among kings. Some might argue that the relationship between the chairman and the others was closer to that of the pope and the cardinals. After all, they were wise men and should be treated as such. And yet, as this book will show, history does not support this thinking. We begin with Arthur Burns and some of the major problems he inherited— and made worse. We then move forward to the cameo appearance by G.

He could hardly afford to move like a snail—and a cautious snail at that—when he had less than two years to make his mark. Paul Volcker, during his eight years as chairman, always seemed to be in the middle of a whirlwind of actions and reactions. There was no such thing as Volcker sitting back and getting a chance to study what his past policies had wrought, because he was on to the next set of problems. Of all the modern Fed chairmen, his achievements—and they are considerable—are probably the hardest to quantify and easiest to generalize.

Although all Fed chairmen have at one time or another taken advantage of their special exalted status, the one who seemed to perfect this role was Alan Greenspan. Greenspan was professorial but not in an Arthur Burns domineering sort of way. People generally were very impressed with his opinions; he had a way of saying one thing and then qualifying his statement, the result being that there were times when they were not quite sure what he said, but they liked the way he said it.

As for the current Fed chairman, Ben Bernanke, it is too early to tell how he will play his new role. Early appearances are that it will be an amalgamation of what some past chairmen have done. For example, he has been professorial like Burns but without talking down to people. His desire to be an educator, as well as a central banker, shows through.

These can be viewed as part of his learning process. However, transparency about the future and about desired outcomes may not be as useful as being transparent about what is happening now, what has happened in the recent past, and why these things happened. Transparency should also mean releasing information in such a manner that it will be neither misunderstood nor misinterpreted.

Transparency and Fed-speak should be viewed as exact opposites. One thing for sure—the Fed should not use transparency as a public-relations tool, especially because actions ultimately speak louder than words, particularly when words and actions do not coincide. How many of his academic shackles can he shake off in one of the most practical jobs a public servant can have?

So far, he is no Arthur Burns—and that is meant as a compliment. So far, he is no Paul Volcker—and that is not meant as a compliment. Only time will tell whether he will develop enough market and street smarts to balance his desire to rely on academic theory and modeling. Hopefully, he will realize that it is the policy decisions that count—not the sophistication of the approach used to arrive at the decisions.

This is especially true when, for an extended period of time, policy is neither at one extreme nor the other. With regard to economic performance, what is going on in the private sector—regarding consumers and businesses in particular—is of much more importance. If the economy is healthy and doing well, it is the private sector that is primarily responsible. If the economy is sick and doing badly, it is the private sector that is primarily responsible. Yet, there are some exceptions. For example, in mid the housing market, and ultimately the economy in general, started to pay the price for the excessive ease of monetary policy from late to late The problems created were numerous.

There were also problems with respect to the packaging of loans and then their being sold in order to package more loans, a lack of understanding by buyers of mortgagebacked instruments that the quality of the paper and the risks involved were not what they believed to be the case—and some government and quasi-government 8 DO THEY WALK ON WATER? Monetary policy is not just interest rates and availability of funds.

There is a regulatory side to monetary policy, and the Fed did little in the late to late period to dissuade lenders and to warn buyers about the risks involved. As a matter of fact, Chairman Greenspan made the statement that when short-term rates were near rock bottom, adjustable rate mortgages were attractive for those borrowing mortgage money. What counts is what price was paid in the real world as a result of inappropriate policies. Moreover, the breadth of the adverse impact was worldwide, and major losses are still to be uncovered.

If there is any slight tinge of optimism in this picture, it is that write-offs and write-downs will probably ultimately be overstated, because in illiquid markets, the prices being quoted on assets are likely to be below what they are worth on a more fundamental long-term basis. This could be good news for some institutions, but the effects of that good news may not be felt until as far off as Many seem to believe that the chairman of the Fed and the Federal Reserve are one and the same when it comes to monetary policy.

Yet, that is not the case.

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In other words, the chairman does not make his policy recommendations in a vacuum. Paul Volcker, who was chairman from to , can vouch for that. More often that not, what these economists and staff people say will have a noticeable impact on their bosses, who are responsible for making monetary policy. Thus, if monetary policy is less important to economic performance than generally realized, and monetary policy is not a one-man show, then the chairman of the Fed often winds up getting more of the credit, or more of the blame, when things go very right or terribly wrong.

Needless to say, he was not the most popular person among politicians, whose long-run approach looks as far as what happens at the next election. Volcker was viewed as a policy hawk because he was generally in favor of high interest rates and tight money, but other FOMC members were policy doves. Volcker won the battles, but it was not too many months before he resigned in frustration. As we will see, William Martin, as chairman of the Fed, had a way of avoiding this loss-of-control problem.

He had certain opinions on policy and he would check with other FOMC members to see whether they agreed with his views. If they did not, or if there was a considerable minority that would vote against him, he would not pursue his desires and would quietly slip in with the majority. Of course, his years at the Fed were quiet compared to what Volcker experienced. It is easy to compromise when the price for doing so is not all that great.


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It should be clear from this analysis that monetary policy is not conceived and implemented by just one person—the chairman. Moreover, monetary policy decisions are not made in a vacuum, and there are forces outside the Fed that support or run counter to what the Fed wants to achieve. Thus, any statement that a Fed chairman has done a great job or a terrible job is not only overly simplistic, but in some cases may be incorrect.

Eurodollars a dollar deposit in a U. Being on the staff of the Dallas Federal Reserve Bank had its personal advantages. In other words, it was virtually impossible for us to do all the research work that was necessary, especially when it came to regional studies. This meant a heavy workload for the both of us, but there were also some advantages from a personal point of view.

In contrast, the district Federal Reserve banks today have large research staffs, but it seems as though they spend too much time analyzing the national economy, and not enough time on regional considerations. This personal history of my days at the Fed is important because both Bill and I were involved in system committees and studies that would not have happened if we had been in a large district bank such as New York.

When there were system-wide committees, we were often given the opportunity in other words, we were volunteered to participate, and there were also opportunities to accompany the bank president to FOMC meetings. What makes this background information important is that I had a chance, although at a junior level, to be directly involved in committee discussions and recommendations. Thus, the following information is not second-hand. For example, I was fortunate to be on a committee of high-powered Federal Reserve System individuals brought together to study a new market instrument called CDs.

These people were well above me in the Federal Reserve hierarchy and included Bob Lindsey, Bob Holland, and George Mitchell, who had overall responsibility for the project. SETTING THE STAGE 11 Frankly, I remember little about the meetings, or our conclusions, except that, based on what ultimately occurred with regard to the growth of CDs, we surely underestimated the future importance of this instrument, the market that it spawned, and the role that liability management has ultimately played in the banking system.

These are the kinds of insights you cannot get from reading historical documents. The s was a time of rapid growth in both CDs and Eurodollars. The Eurodollar deposit was started by a Soviet bank in London that did not want to be subject to regulations, especially by the American government after all, there was a cold war going on.

A small but emerging trading market began in the early s for these deposits, and other banks besides the Soviet bank became involved. In the late s, this market took off, and the rest is history. Much of my knowledge about Eurodollar deposits and the Eurodollar market came from a friend and colleague, Claude Tygier. I met him in the mids, when he became the head foreign exchange trader at J. Henry Schroder Bank in New York. In contrast, when I was at the Federal Reserve in the early s, I kept a close eye on international arbitrage operations, which were about as rudimentary as one could get.

A typical international arbitrage operation occurs when a higher return can be achieved in the money market for one currency by using another currency and swapping it on a fully hedged basis through the foreign exchange market. What was required on my part was primarily watching the relationship between U. Treasury bills and U. Treasury bills, although there were some operations outside the money market area between U. Treasury notes and British Gilts. This was like watching paint dry. Things changed, however, when the CD and Eurodollar markets came into being.

International markets were just starting to come of age, and central banks were not always prepared to handle these changes. The s was an era of rapid growth in the domestic money and capital markets. It was also a time when Regulation Q was alive and well. This regulation put interest rate ceilings on various types of deposits, and when interest rates were at relatively high levels for that time and pressing on these ceilings, depository institutions could not compete for funds. Thus the money went outside the depository institutions, and with little money coming in and a great deal of money moving out, they could not make new loans.

As a matter of fact, they had trouble rolling over already outstanding loans. Yet, this was not the entire story during the s. In addition, the Fed also used as an intermediate policy target an item called free reserves, or its counterpart net borrowed reserves. Free reserves occurred when excess reserves in the banking system were greater than bank borrowings at the discount window; and net borrowed reserves occurred when window borrowings were larger than excess reserves.

Do They Walk on Water?: Federal Reserve Chairmen and the Fed - Leonard Jay Santow - Google книги

When the Fed wanted money to be tight and wanted the banks to cut back on loans and investments, they put the banking system into a position of net borrowed reserves. To a large degree, the Fed had control over the size of net borrowed reserves. This amount could be several billion dollars, and it was only a matter of time before the banks would knuckle under because they were not allowed to be regular and frequent borrowers at the discount window.

At the other extreme, when the Fed was trying to stimulate the economy, it would move the banking system into substantial amounts of free reserves, which meant large amounts of excess reserves sloshing around in the banking system. There were times, however, when this approach was not always as effective as desired. The Fed would push reserves into the banking system, and the banks would not always fully use the resources that were available to them.

These were not the only tools of the Fed policy managers. There were required reserves on both demand and time accounts, and these could be moved up or down depending on how tight or easy the Fed wanted policy. Marginal changes in these requirements could have a considerable impact on the overall ease or tightness of monetary policy. Thus, if an analyst looked back and studied monetary policy through much of the s, looking at just interest rate levels as a measurement of Fed ease or tightness was misleading. Policy was much more than interest rates, and much, much more than just an overnight interest rate.

The importance of these items with respect to monetary policy has virtually disappeared. At present, Regulation Q covers only interest rate ceilings on deposits, and bending the yield curve was long ago abandoned. Thus, in a more sophisticated world, the Fed is now using a less sophisticated approach to policy. Yet, although the book starts with Burns and , background information presented with respect to Martin and the s is included not only to indicate the circumstances that Burns inherited, but also to allow the reader to look back at a period when the Fed had available—and used—a broad array of policy tools.

One wonders how monetary policy and its impact might have been different through much of the last few decades, had the Fed been less one dimensional, and in some cases less conceptual, in its use of policy tools. Not that the Martin period was unimportant, but rather that the monetary circumstances, both at home and abroad, were so different from what developed as time moved on. If there was a logical break between time periods and between chairmen, the end of the Martin era and the beginning of the Burns era was the most obvious.

Also, U. Markets were so much simpler. On the international side, a relatively few industrial countries received most of the attention, and there was a clear distinction between developed countries and those that were developing or had yet to develop. Their importance has increased exponentially.

My boss was James Wolfenson, who would go on to be the head of the World Bank. Schroder funded itself largely through foreign central bank deposits, and one of my jobs was to meet with central bankers around the world, give advice, and conduct seminars.

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Once you have worked for a central bank, other central bankers consider you a member of a large fraternity. Relationships between central banks are typically much more cordial than those between governments. For example, when the French moved their gold out of the United States, it was accomplished in a cordial and professional manner by the two central banks involved.

When visiting these central banks, I became quite familiar with the various organizational structures and the way policy was implemented. Each was very different. The seminars I conducted tended to run from as little as a day to as long as a week. They covered a wide variety of topics, running the gamut from a U. The breadth of the discussions depended to a considerable degree on the sophistication of the people in the audience.

For those central banks that were rich in foreign exchange reserves, there was considerable discussion as to how they could improve their investment portfolios. It was also not unusual to be asked about the tools and techniques other banks were using and how they might apply, in order to improve their investment performance.

After speaking at several dozens of these seminars over a period of almost a decade, I realized that what worked for the Federal Reserve would not work for other central banks. I bring this up because this book concentrates on U. Realize that—except as background material that might prove to be thought provoking—the analyses, critiques, and recommendations presented here are for the Federal Reserve and its monetary policy, and are likely to have less usefulness for other central banks. For a better understanding of how central banks—all of which are in the same business of managing monetary policy—can be different in so many ways, let us consider some background information.

The European Central Bank is a special case. This means that a monetary policy stance that is too easy for some countries may be too restrictive for others. Nevertheless, up to this point, the monetary union has held together because there have been economic advantages to breaking down economic and political barriers that appear to offset mistakes, misjudgments, and questionable approaches to monetary policy.

The book was generally updated about every ten years, which frankly was not often enough. It covers every aspect of the Federal Reserve System. Because I had been involved in the government securities business, I was one of a number of people asked to read a draft and make comments and suggestions.

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Ann-Marie Meulendyke wrote the expanded and updated edition. This book was far more detailed than the Purposes and Functions book, but if you studied both, you had a solid background on the Federal Reserve, its history, and its operations. Unfortunately, if you talk to most people who are currently involved in the debt markets in general, and the government market in particular, they are unaware of these two valuable sources of background information. Part of the reason is that in earlier days, government securities dealers were considered the centerpiece of the debt markets, and those involved in the markets wanted to know as much nitty-gritty about the Federal Reserve as possible.

However, as time passed and independent government securities dealers were bought up, went out of business, or became only one division of a debt-market business, detailed information about the Fed seemed to be not as important. However, recently there has been positive news in this regard, although this benefit was spawned out of adversity. Here is a useful summary. Monetary Policy and Financial Markets. On December 23, , the Federal Reserve was created by an act of Congress. I have quoted key items that show some of the history prior to the inception of the Fed, at the time of its inception, and changes that have occurred since its inception.

People immigrated to the United States primarily from Europe, and immigrants from one country often settled in the same locale; the skills and vocations they had acquired abroad were often carried on in the new country. In essence, the United States was a loose federation, and people in rural areas typically had little in common with those in cities. Thus, it is no surprise that the concept of a central or national bank was late in coming to the United States, as it was created against a background of long-standing distrust of centralized power.

The charter was for twenty years, and when it expired, the Second Bank of the United States was granted a charter in According to U. It very soon became clear that banking was running well behind the needs of the country. Again, from U. The Treasury Department altered reserve levels by adding or draining funds that it kept on deposit at central reserve city banks.

The large city banks were unable to respond adequately to seasonal and cyclical variations in the cash and credit requirements of the economy. Pierpont Morgan. The panic inspired considerable interest in developing a better system to deal with future crises. A series of congressional studies, hearings, and proposals culminated in the passage of the Federal Reserve Act in December That was answered when the United States became militarily involved in the war.

In the s, an economic boom period occurred, with all of its excesses and imbalances, and the boom turned into a bust in with the stock market crash. This turned into a recession in the s. The Federal Reserve, which was created by the Federal Reserve Act of , was not set up in a way or given the necessary powers to combat all of the problems it encountered during this boom and bust period. The initial structure of the Federal Reserve was as follows, according to U. The regional Reserve Banks were to have considerable authority to set the terms for credit provision in response to local developments and to regulate member banks in their districts.

The Board in Washington was assigned responsibility for overseeing the activities of the Reserve Banks. The twelve regional banks were headed by governors, most of whom had been commercial bankers. Beginning in , Governor Strong sought to achieve better coordination of open market operations. He preferred to have all operations on behalf of the System conducted by the New York Federal Reserve. Limited available supplies, however, led the Reserve Banks to purchase a mix of securities that spanned the maturity spectrum.

The act formally charged the Board with responsibility for exercising such powers as it possessed to promote conditions consistent with business stability. The act also took away the power of individual Reserve Banks to buy or sell government debt without permission of the FOMC, thereby formally ending one of the major controversies of the s. Finally, it made permanent the provision of deposit insurance. The year was chosen as the end of this period because it was a time when the approach to monetary policy changed in a drastic way.

From the start of World War II up to , the Federal Reserve pegged yields on long-term government securities bonds at very low levels.

The rapid rate of expansion in these areas and the economy in general would never have taken place without the Accord. The power was there, with the main problem being that the Fed, and others, did not act in a timely and forceful manner. Having power is important, but it does little good if it is not used in an appropriate and opportune way. A brief history of central banking in the United States provides useful background information before delving into the whys and wherefores of Federal Reserve monetary policy.

Yet, because of the internationalization of markets and institutions in recent years, it is also worthwhile to look at some of the history and structure of other major central banks. When the European Central Bank ECB began operating, one of our major clients a foreign government not in Europe asked us to do a detailed study of the euro and the ECB, and whether it would succeed, or even last. Apparently, there were staff studies done inside this foreign government that suggested that both the euro and the ECB would fail.

Much of their reasoning was based on the confederation history of Europe, or should I say the lack thereof. Moreover, ethnic differences were considerable to say the least, and new countries evolved while others disappeared. The study took well over one month, and I worked on it almost full time. With respect to my forecasts, so far, so good. For Canada and Mexico, the advantages were obvious and the disadvantages few, and this has since shown up in their economies in general and their foreign trade numbers in particular.

As for the United States, the argument still rages as to how the pluses and minuses balance out. While these were similar to the discussions that originally occurred when the euro and the ECB were implemented—who would be better off and who would be worse off—they no longer seem to be major issues. The committee was made up of the governors of the then European Community EC central banks and the general manager of the Bank for International Settlements BIS , a professor of economics, and the president of the central bank of Spain.

The commission recommended that the economic and monetary union should be achieved in three stages. Stage two started on January 1, The main tasks here were to improve central bank cooperation and monetary policy coordination, start preparations for the establishment of the European System of Central Banks ESCB , and to work towards the creation of a single currency in the third stage.

On January 1, , the number of member states increased to twelve when Greece entered the third stage of the EMU. Slovenia was the thirteenth state to become a euro area member, and that occurred on January 1, ; in early , Cyprus and Malta became members. The central banks that are members automatically become part of the Eurosystem. Its responsibilities are stated as follows: To adopt the guidelines and make the decisions necessary to ensure the performance of the task entrusted to the Eurosystem; To formulate monetary policy for the euro area. This included decisions relating to monetary objectives, to key interest rates, the supply of reserves in the Eurosystem, and the establishment of guidelines for the implementation of those decisions.

Yet in the real world, the primary objective of the ECB is to control price increases. The attempt is to keep the twelve-month consumer price index increase to less than 2 percent. As for policy meetings, the Governing Council usually meets twice a month in Frankfurt. At the second meeting, the Council talks mainly about issues related to other functions and responsibilities of the ECB and the Eurosystem. The president, aided by the vice-president, conducts the conference. The bank is a state-owned institution; it acts as the central bank of the United Kingdom, and is responsible for managing the monetary policy of the country.

However, generalized objectives of most central banks and their order of precedence can be misleading. Moreover, when a recession is near or occurring, that typically will take precedence over price containment. MPC decisions are announced after each monthly meeting. Minutes of their meetings are published two weeks later.

The bank performs all the functions of a typical central bank, such as maintaining price stability and supporting the economic policies of the U. All of these guidelines and rules seem so clear cut, but when it comes to determining what monetary policy should be at any given time, that is not the case. For example, there is little doubt that the governor of a central bank is the kingpin, but the power of a governor can vary from one central bank to another.

The governor voted on the side of raising the rate, and he lost. If that had happened at some other central banks, I am not sure that would be the case. In the case of the European Central Bank, it is highly unlikely that Jean Claude Trichet would ever lose on an important vote; in the case of the Federal Reserve, while it is not unusual for one or two policymakers to vote against the majority, as far as I am aware, the chairman has not been on the losing side on any major issue.

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There have been a few cases of dissenting votes at the Bank of Japan, but nothing that placed in doubt who was in charge. In looking at the next two central banks, keep in mind that structure and methodology do not tell the entire story. He is a former deputy governor for international relations of the Bank of Japan and deputy governor of the Japan Development Bank.

In one of my early trips to Japan, he asked me if I would be willing to conduct seminars on the U. I bring this up because, as a result of my meetings in Japan, I have gained considerable knowledge about how things really work in that country, including the political side. For example, the independence of the BOJ has always been limited, even when the laws were changed to give the central bank more independence.

Do They Walk on Water?: Federal Reserve Chairmen and the Fed

This is especially true with respect to who becomes the governor of the BOJ. If you think this comment is overstated, all one has to do is look at the political problems in when the prime minister attempted to appoint a new governor who had the backing of the Ministry of Finance, and was rebuffed by the upper house of the Diet. The information that follows with respect to the BOJ, however, is primarily boiler-plate so that you can see how the bank came into being and how it differs from other major central banks.

After the war, the Allies made some changes that gave the BOJ somewhat more independence than had previously been the case. However, it was not until that the laws governing the BOJ were revised, based on the principles of greater independence and transparency.


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  • This was a step in the right direction, although there is more to be done regarding independence and transparency, especially the former. Currently, the organization of the BOJ is as follows. As for the Board, it comprises nine members consisting of six deliberative members, the governor, and the two deputy governors. The Board has a chairman elected by Board members, and the chairman exercises general control over Board business.

    When attending Board meetings for monetary control matters, these outsiders may submit proposals about monetary control items or request that the Board postpone a vote on such matters until the next Board meeting of this type. The bank is capitalized at million yen in accordance with the law, with approximately 55 percent of the capital subscribed by the government.

    The holders do have some rights at least on a theoretical basis in the case of liquidation. I accepted the invitation and the meeting took place several weeks later. I had hoped to develop some sort of consulting relationship similar to one that we previously had with the Monetary Authority of Singapore, but that did not happen. The central bank is about as traditional as a central bank can be, except that, in many ways, it is more aggressive and capitalistic than other central banks. The hope here was to be more aggressive in taking on risks with the expectation of getting greater rewards.

    To be charitable, one can say that the currency in the foreign exchange market is managed; to be less than charitable, one can say the currency is rigged, which means purposely held down in price in order to stimulate exports and build foreign exchange reserves to help grow the country. The undervalued Chinese currency also helps explain why so many U. Of course, six decades of communist rule has not done wonders for having creditworthy standards, let alone the data to make such judgments. This may seem like an excessive introduction to a section that talks about the nuts and bolts of a central bank, but unless these comments are made, one might assume that this is just another communist institution run by a communist government.

    From to , it was the only bank in the country and therefore had both central banking and commercial banking responsibilities. Because of the rapidly changing economic landscape in China, in the bank was restructured in a major way. Provincial and local branches were done away with, and they were replaced by nine regional branches.

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    Select a query type below and message the shop directly. Your message was sent successfully. You can expect a response within 2 business days which will be displayed in your Message Centre. Ask a question: 0 Answers. A crowd gathers. People crane their necks. Cameras flash. The limo door opens. Who is it-Mick Jagger? Tiger Woods? It's Alan Greenspan-and the crowd still goes wild. Many felt Greenspan walked on water during his lengthy term as Chairman of the Federal Reserve System. But was he a genius Last seen price R1 Do They Walk on Water? Log in to your account to manage your alerts.

    Add a lower price to be notified. Example threshold: Praeger Do They Walk on Water? Many felt Gre Product Details Questions 0 Features Author. Leonard J. But was he a genius or, as Tolstoy might portray him, simply someone who could manifest confidence while attempting to captain an uncontrollable ship? In this book, economist Leonard Santow casts a steely eye on the Fed and its five most recent chairmen-Arthur Burns, G. Along the way, readers learn what function the Fed performs and why, how monetary policy differs from fiscal policy, which levers the Fed uses to change the money supply and control inflation, and more.

    This is one of the few books to explain the inner workings of the Fed and its Open Market Operations in layman's terms, while evaluating its most recent chiefs in their efforts to keep inflation at bay and the economy humming. Written in an easy and accessible style, the book also contains insights on the subprime mess and the securities that helped bring down the real estate house of cards, and it offers prescriptions for smoothing the choppy economic seas going forward. Update Location. If you want NextDay, we can save the other items for later. Yes—Save my other items for later.

    No—I want to keep shopping. Order by , and we can deliver your NextDay items by. In your cart, save the other item s for later in order to get NextDay delivery. We moved your item s to Saved for Later. There was a problem with saving your item s for later. You can go to cart and save for later there. Do They Walk on Water? Federal Reserve Chairmen and the Fed.

    Average rating: 0 out of 5 stars, based on 0 reviews Write a review. Leonard J Santow. Walmart Tell us if something is incorrect. Add to Cart. Free delivery. Arrives by Friday, Sep Free pickup Fri, Sep

    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed
    Do They Walk on Water?: Federal Reserve Chairmen and the Fed Do They Walk on Water?: Federal Reserve Chairmen and the Fed

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