Is Federal Reserve A Private Bank?

Last Revised on November 23, 2010

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Federal reserve is a bank formed by government to regulate the economic activity. But recently there have a lot of critics who claim it’s not a government bank anymore, it is private. They say the Federal Reserve did the bail out of or purchased big banks such as Bear Stearns, Countrywide Financial, etc. They allow bank to give people low returns for the cash they put in their account, while allowing to get charged high interest rates on credit cards.

Many say that the Fed has been going out of control in the past few years. It was sold to American public as a way to eliminate inflation, recession and overseeing the banks, but it in itself has become the biggest problem any bank has faced.

Federal reserve bank has become a great place for big financial players too. Smartest ones somehow find their way into this institution, and after few years of gaining vast majority of the experience there is available employees join other banks. It has sort of become like an internship place for WallStreet pros and bank managers, after understanding the loopholes.

Fed’s job is supposed to create economic prosperity in America, but can it force the market to go where it think is the right direction? Should Fed Reserve be abolished as a government entity then? Has Fed Resererve been running as a private banking system? Do they need to be audited by an independent agency?

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One Response to “Is Federal Reserve A Private Bank?”

  1. Free of Debt Nationwide Says:
    November 23rd, 2010 at 12:35 pm

    In a sense, it’s a private central bank owned by many big corporation banks since all the treasuries and bonds are held by them. They steal money and manipulates the market howsoever they want to.

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