Question

What is the argument in favor and against the FED being held responsible for the regulation and supervision of banks and other financial institutions?

Answer 1

Arguments in favour of FED for regulation and supervision of banks and other financial institutions are -

• The main argument is that it is very important that monetary policy and should monitered and determined by the policitcians
• When there will the Complete control by the FED elected officials the likelihood of the political business cycle will increase.

Arguments against of FED are -

• At the time democracy, the monetary pilcoes should be determined by the elected officials.
• The main argument is the if we place central bank under the control of elected official would result into to confer the benifits by coordination and integration of monetary policy