Bummer have to pay to read that article.
Glad to hear the Fed is studying risks of systems that have been in place for years... Almost like they are doing their job
Forgive me if you already know what follows. Most people don't.
The Federal Reserve is not a government regulatory agency. It is a coalition of banks. The name makes it sound like something different from what it is and many people assume it is a branch of the federal government. The Fed is studying the risks to its members in the banking industry, which is to be expected. We can also expect them to use their influence with government to push back any risks they perceive - such pushback may or may not be in the public interest.
From the FAQ on the Fed's site: "It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms."
http://www.federalreserve.gov/faqs/about_14986.htmMy paraphrase of that is "You can't touch us - and nobody else can either."
The fact that the Fed has a dot-gov domain name for the very site in which it asserts its independence from government adds to the murkiness of the situation.
Lest we forget what they are about, here's that famous quote from Bernanke: “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing,”
http://blogs.wsj.com/economics/2010/12/22/is-the-fed-printing-money/