Federal Reserve Independence is Lost

Central banks were set up for independent banking functions, on the premise it’s best for a country to keep its financial system from political influences.

Politicians have always had a tendency to produce financial and economic pressure to change any banking independence during stressful economic times.

How are major central banks doing with regard to their current national financial crises?

The Bank of England had been relatively independent but rather involved with its government bond market. The Bank of Japan had been somewhat independent since 1998 but it often has been politically directed.

Congress, which always loosely supervised the Fed now wants audits and more disclosure, which would exert pressure.

However, the Dodd-Frank Act now has the Fed go more deeply into the American economy than before, and the present Fed Chairrnan, Ben Bernanke, has had a major tendency to lean to administration policy. (See the Earl J. Weinreb NewsHole® comments.)