The independence of the Federal Reserve is considered a cornerstone of its identity, crucial for keeping monetary policy decisions free of electoral politics. But do we really understand what is meant by "Federal Reserve independence"? Using scores of examples from the Fed's rich history, The Power and Independence of the Federal Reserve shows that much common wisdom about the nation's central bank is inaccurate. Legal scholar and financial historian Peter Conti-Brown provides an in-depth look at the Fed's place in government, its internal governance structure, and its relationships to such individuals and groups as the president, Congress, economists, and bankers.
Exploring how the Fed regulates the global economy and handles its own internal politics, and how the law does—and does not—define the Fed's power, Conti-Brown captures and clarifies the central bank's defining complexities. He examines the foundations of the Federal Reserve Act of 1913, which established a system of central banks, and the ways that subsequent generations have redefined the organization. Challenging the notion that the Fed Chair controls the organization as an all-powerful technocrat, he explains how institutions and individuals—within and outside of government—shape Fed policy. Conti-Brown demonstrates that the evolving mission of the Fed—including systemic risk regulation, wider bank supervision, and as a guardian against inflation and deflation—requires a reevaluation of the very way the nation's central bank is structured.
Investigating how the Fed influences and is influenced by ideologies, personalities, law, and history, The Power and Independence of the Federal Reserve offers a clear picture of this uniquely important institution.
Peter Conti-Brown is assistant professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania. He is the coeditor of When States Go Broke and Research Handbook on Central Banking.
"Mr. Conti-Brown, a gifted legal historian who teaches at the Wharton School of the University of Pennsylvania, . . . has accomplished two near impossibilities: He has opened up new areas of inquiry on an overworn topic, and he has made them intellectually rigorous as well as riveting to read about.""--Kevin A. Hassett, Wall Street Journal
"With plenty in the media recently about Federal Reserve Chairwoman Janet Yellen and attempts to raise interest rates, [The Power and Independence of the Federal Reserve] could not have come at a more opportune time. Readers concerned with monetary policy and the role of the Federal Reserve will discover that this specialized title has much to offer."--Library Journal
"[A] stimulating book. . . . Conti-Brown gives us much food for thought about how central banks go about their work."--David Green, Financial World
"Critiques of central banking have for too long been the preserve of economists and insiders, while legal scholars and political scientists concentrated on the regulatory state. Scholarly and stimulating, The Power and Independence of the Federal Reserve breaks this mold and deserves to attract wide interest and discussion."--Paul Tucker, former deputy governor, Bank of England and senior fellow, Harvard Kennedy School and Harvard Business School
"This excellent book focuses on the operations and governance of the Federal Reserve. With an entertaining style and sound justification, Conti-Brown concludes that there are too many diverse functions and policymakers within the Fed, and he offers sensible policy alternatives. His book is essential reading for anyone concerned about monetary policy and the role of the Fed, and central banking more widely."--Charles Goodhart, emeritus professor, London School of Economics
Table of Contents