The U.S. central bank has come under criticism for being too powerful from presidential candidates and Republican lawmakers. Fred Katayama reports.
The Fed under attack this election season. Criticism comes from presidential candidates from the far right and far left as well as Congressional Republicans. They range from Republican frontrunner Donald Trump's call for congressional reviews of the central bank's decisions to Democratic candidate Bernie Sander's call to audit the Fed to make it less beholden to Wall Street. Central bankers are being blamed for not doing enough to spur economic growth as the Fed gets set to raise interest rates again. Critics also view the Fed as too powerful. The regulatory authority of it and other central banks were enhanced after the financial crisis. The Fed must be allowed to maintain its independence, says Brookings Institution fellow Aaron Klein, but it could use a tune up. SOUNDBITE: AARON KLEIN, FELLOW, BROOKINGS INSTITUTION (ENGLISH) SAYING: "The idea that there's nothing wrong with the Federal Reserve System created a century ago doesn't kind of pass common sense." Klein suggests the Fed consider reviewing its regional structure. SOUNDBITE: AARON KLEIN, FELLOW, BROOKINGS INSTITUTION (ENGLISH) SAYING: "The Federal Reserve structure was set up into twelve regional districts created in 1913. At the time, Minneapolis' and San Francisco's districts had about the same share of the U.S. population. Today more than one in five Americans live in the San Francisco district. And fewer than one in 35 in the Minneapolis district." Former Fed officials say the central bank could take steps to make itself more transparent, for instance, by replying quickly to lawmakers' requests for information. But Klein doesn't foresee any change taking place in this election year. And former officials say the Fed isn't likely to embrace big changes to its policy playbook.