PRESS RELEASE
Glass-Steagall Reality Challenges Fed ‘Symposium’
June 20, 2016 (EIRNS)—The third of the Minneapolis Federal Reserve symposia on "Ending Too Big To Fail" was planned for two densely academic panels on bank capitalization levels, by scholars of the Peterson Institute in Washington, but became a debate on Glass-Steagall, due to two interventions by EIR representatives.
There are two distinct Federal Reserve "stories" currently: the utter failure of the non-viable zero-interest monetary policy of the Fed, ECB, Bank of Japan, and BoE in the real world; and the somewhat Ivory Tower bank-regulation debate on "ending too big to fail" being run by Minneapolis Fed President Neel Kashkari.
At this symposium Kashkari, as luncheon speaker, was completely surrounded by Peterson Institute speakers and a largely IMF/Treasury/Federal Reserve audience of about 60. Their discussion of the impact of various levels of capital in large banks was so arcane that when EIR first intervened to say that Glass-Steagall was the only historically allowed solution to this debate, the moderator had to translate "Glass-Steagall" as "structural reform" for the panelists before they responded.
Kashkari’s speech, however, thoroughly rejected the bail-in policy—"it has caused something of a bank panic in Europe this year"—and said the Wall Street banks still need to be broken up in some way, and that the decision had to be made this year. Trying to "resolve" one of the big Wall Street banks in crisis, he remarked, was "like trying to disassemble an aircraft carrier at sea in a hurricane." Following this, interventions demanding Glass-Steagall by EIR and by a retired Federal Reserve economist in the audience turned the second panel entirely into a Glass-Steagall debate. A number of U.S. and foreign contacts were made as a result.
Privately Kashkari received a full briefing on the necessity of a Hamiltonian credit policy to replace the Federal Reserve’s failed policy, which is sinking the economy.
