Toomey’s quest to end Fed ‘mission creep’ could have legs

By Kyle Campbell

Sen. Pat Toomey, R-Pa., wants to reform the Federal Reserve Banks if it’s the last thing he does as an elected official. And he very well may succeed.

The ranking member on the Senate Banking Committee, who will not seek re-election this fall, has made it a priority for his final months in office to rein in what he describes as “mission creep” within the Fed’s 12 regional banks….The clearest example of this is the location of the 12 regional banks, which reflect the population centers of a century ago, Karen Petrou, co-founder and managing partner of Federal Financial Analytics, said. There are two reserve banks in Missouri and only one west of the Rocky Mountains. With so many of the reserve banks’ original duties able to be carried out digitally, Petrou said the best justification for keeping regional locations is to monitor the economy in different parts of the country. To that end, a reworking of the system would be best served by focusing on the locations and issues prevalent today, she said. “To the extent that the reserve banks do what they say they still have a mission to do — which is to reflect the national voice in economic policy — then they need to better represent the nation,” she said. “And that’s true not only in the diversity with the heads of banks … but also in the nature of their mission.”