Why Do We Have a Central Bank? - A good question!

[WhiskeyGirl]

Why Do We Have a Central Bank?

In short, central banking has been neither necessary nor sufficient for the development of a modern economy and financial system. A number of reform proposals for the Fed are being crafted, but there is no agreement on why the institution exists.

There is no liquidity crisis now, however, and no justification for continued lender-of-last-resort activity. There are quite possibly still large unrecognized losses on banks' balance sheets associated with the housing collapse and other unwise lending. These losses mean such institutions are in reality undercapitalized, not short of liquidity.

...the economy suffers because none of the Fed's policies will fix the banking system. The failure to fix the banks, not a nonexistent deflation threat, is what calls into mind Japan's lost decade of the 1990s. Banks with large, unrecognized losses will not make new loans while losses from the old ones grow.

'banks aren't lending...we can't find qualified borrowers...businesses aren't hiring...'

Regulators should be consistent in calling for banks to write down assets and recapitalize themselves (and not just apply the policy to smaller institutions that are being closed). Now is not the time for banks to raise dividends, as numerous large banks are seeking to do. Now is the time to raise capital. In the meantime, the Fed must stop conducting fiscal policy under the guise of monetary policy. Taxpayer bailouts of weakened banks would be a terrible idea. But, if done by Congress, it would at least be subject to democratic debate and be conducted in the open.

What comes to mind? IndyMac.  I recall one person suggesting the dealmakers were acking like they were drunk or something.  Why isn't anyone looking out for taxpayers?  Main Str.?

Why do we have a central bank?  Give money to global businesses that move jobs to foreign workers?  Give money to foreign banks?  Give money to hedge funds?  Big banks without consumer exposure?  Special interests?  Elite individuals?

read more here - http://www.cato.org/pub_display.php?pub_id=12613