This event will examine the complicated institutional structure and politics of the Fed and the fundamental changes from its original design, and will consider where governance of the Fed may go from here.
Fannie Mae and Freddie Mac, operating entirely as an arm of the government, entirely dependent on the credit of the government, and getting huge subsidies and favors from the government, have begun making large profits, all of which they are paying to the US Treasury. Speculators in the old, junior preferred stock and common stock of Fannie and Freddie are objecting that this is unjust.
Congress should rein in the tendency of the FSOC to simply implement the decisions of the FSB in the US. The FSOC’s decisions on SIFI designations should be made on the basis of clear standards and guidelines; it cannot be simply a matter of regulatory discretion.
Anat Admati and Martin Hellwig are not suggesting a freer market in banking in their new book The Banker's New Clothes. They believe in future regulation which will somehow be more successful than all the regulation of the past, which has so notably failed to prevent, and often enough has helped cause, recurring bubbles, busts and panics. How plausible is their belief?
Government-directed lending policies create an unfavorable financial environment that pushes resources out of the financial sector, reducing business and consumer access to credit and limiting economic growth.
Nationally, homes look overpriced, but there can be great variations on a regional or even neighborhood level. To gauge the sustainability of home prices within a metropolitan area generally, I suggest looking at measurements of market fundamentals such as unemployment, job growth, income, rental values, population levels, and mortgage rates.
Ways and Means Committee Chairman Dave Camp is proposing to tax all assets over $500 billion of big banks and other “systemically important financial institutions” (SIFIs). Two giant, hyper-leveraged financial firms are remarkably absent from this proposal: Fannie Mae and Freddie Mac.
Loan risk is at a higher level than is conducive to long-run market stability. Despite frequent assertions by the National Association of Realtors and other interest groups that the national credit box is too tight, the facts indicate it is loose by historical standards for prudent lending and is getting looser.
Under Dodd-Frank, FSOC has the authority to designate any financial firm as a systemically important financial institution if the institution’s “financial distress” will cause “instability in the US financial system.” Unless the power of the FSOC is curbed by Congress we may see many of the largest non-bank financial firms brought under the control of the FSOC and ultimately the Fed.
In this conference, veterans of the Iraq and Afghanistan wars, mental health and disability experts, and an economist will discuss current hurdles to rehabilitation, and suggest alternatives that could more effectively expedite the reintegration of veterans into their families, communities, and workplaces.
Please join Representative Randy Forbes (R-VA), AEI, the Heritage Foundation, and the Foreign Policy Initiative for a timely discussion on the 2014 QDR and the future of American defense strategy in an era of constrained budgets.
This event is livestream only.
AEI’s Philanthropic Freedom Project welcomes Bill Gates for an exclusive event at AEI.