The United States Treasury is responsible for establishing the fiscal policy and currency for the nation. Around the world, US Treasuries are bought and sold as easily convertible securities. How does this impact the Dallas Federal Reserve? Did the Texas Bankers Association Annual Strategic Opportunities Conference advance Fed policy?
US Treasury Fiscal Policy
On September 11, 1789 Alexander Hamilton became the first Secretary of the United States Treasury. The US Treasury has the duty and authority to determine the proper financial path for the country. In 1914, the US Treasury passed some of this responsibility over to the private Federal Reserve. Why?
Capitalists believe that the private sector should determine the free allocation of capital. Businessmen are on the front lines. They understand the ebbs and flows of markets. They can see the price mechanisms of supply and demand at work every day. The problem with government is that it can simply “order” people to perform an action, irrespective of whether the action is in the best interests of all.
Federal Reserve Monetary Policy
The Fed promised to even out the dangers of economic cycles. A severe recession or depression can destroy a nation, wiping out decades or even centuries of economic progress. The Federal Reserve promised to make downturns, less severe and to set targets for employment and inflation.
Conveyance of Treasuries
During the Texas Banker Association conference in November 2016, NexBank CEO John Holt spoke on the “Reinventing Community Banking: Perspectives on Competing by Innovation” panel. Dallas based NexBank provides institutional services for those who buy Treasuries. Treasuries are guaranteed by the “faith and full credit” of the United States government.
The US Treasury is responsible for macro-economic fiscal policy and the Fed is responsible for macro-economic monetary policy. NexBank provides the capital for micro-economic development.