Friday , July 19 2019
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Ominous News from the San Francisco Fed

Summary:
And you thought the Fed was just about monetary policy. The Federal Reserve Bank of San Francisco wants banks to get extra credit for making loans that help communities adapt to climate change and prepare for future natural disasters. A paper released on Monday by researchers at the San Francisco Fed argues that banks should receive credit for climate-adaptation investments under the Community Reinvestment Act, which requires banks to lend to low- and moderate-income communities. These are the opening three paragraphs of a news item in today’s Wall Street Journal. It’s Laura Kusisto, “San Francisco Fed Wants to Reward Banks for Combating Climate Change,” Wall Street Journal, June 18, 2019. The Fed is already the central planner of the U.S. money supply. It now

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And you thought the Fed was just about monetary policy.

The Federal Reserve Bank of San Francisco wants banks to get extra credit for making loans that help communities adapt to climate change and prepare for future natural disasters.

A paper released on Monday by researchers at the San Francisco Fed argues that banks should receive credit for climate-adaptation investments under the Community Reinvestment Act, which requires banks to lend to low- and moderate-income communities.

These are the opening three paragraphs of a news item in today’s Wall Street Journal. It’s Laura Kusisto, “San Francisco Fed Wants to Reward Banks for Combating Climate Change,” Wall Street Journal, June 18, 2019.

The Fed is already the central planner of the U.S. money supply. It now seems to be toying with the idea of becoming a central planner in other areas.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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