Lee Metcalf: “the topic of my speech tonight is Federal Reserve monetary policy: Is Greenspan's Fed the world's Central Bank? Some…”

“the topic of my speech tonight is Federal Reserve monetary policy: Is Greenspan's Fed the world's Central Bank? Some years ago, William McDonough of the Federal Reserve Bank of New York stated the most important asset a central bank possesses is public confidence. He went on in that speech to note that, ``I am increasingly concerned that in a democracy a central bank can maintain price stability over the intermediate and long term only when it has public support for the necessary policies.'' Public confidence here can only mean the confidence of the Members of Congress in our oversight capacity. Most of the American public, to this very day, have not the least interest in, awareness of, or knowledge of the Federal Reserve System, our central bank. But most Members feel that Allan Sproul, another former president of the New York Federal Reserve Bank, was quite correct in his letter, still quoted by Fed officials, that Fed independence does not mean independence from the government but independence within the government. In performing its major task, the administration of monetary policy, the Federal Reserve System is an agency of the Congress, set up in a special form to bear the responsibility for that particular task which constitutionally belongs to the legislative branch of government.'' Clearly, that form of argument appeals to most Members today.”