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The Fed must continue to supervise banks


  • Richard F. Syron


As we examine ways to restructure government to provide better services at lower cost, supervision and regulation of banks is a prime candidate. The current supervisory patchwork, with its overlapping and redundant functions, raises costs for banks and their customers. ; Richard F. Syron, President of the Federal Reserve Bank of Boston, agrees that one federal agency should oversee each banking institution. He believes, however, that a recent proposal to eliminate Federal Reserve System involvement in bank regulation and supervision would impede the Fed's ability to carry out its mission as the nation's central bank: to ensure financial stability, to implement monetary policy, and to oversee a smoothly functioning payments system. He describes the strong links between bank supervision and the Fed's other central bank responsibilities, using recent New England experience to highlight the role of the Fed in preventing and containing panics and other banking crises.

Suggested Citation

  • Richard F. Syron, 1994. "The Fed must continue to supervise banks," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-8.
  • Handle: RePEc:fip:fedbne:y:1994:i:jan:p:3-8

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    1. Kornai, Janos, 1992. "The Postsocialist Transition and the State: Reflections in the Light of Hungarian Fiscal Problems," American Economic Review, American Economic Association, vol. 82(2), pages 1-21, May.
    2. Alan A. Tait, 1991. "Value-Added Tax; Administrative and Policy Issues," IMF Occasional Papers 88, International Monetary Fund.
    3. R. B. Johnston & Piroska M Nagy & Roy Pepper & Mauro Mecagni & Ratna Sahay & Mario I. Bléjer & Richard J Hides, 1992. "Albania; From Isolation Toward Reform," IMF Occasional Papers 98, International Monetary Fund.
    4. Sijbren Cnossen, 1992. "Key Questions in Considering a Value-Added Tax for Central and Eastern European Countries," IMF Staff Papers, Palgrave Macmillan, vol. 39(2), pages 211-255, June.
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