My good friend Alex Pollock’s latest article in the NY Sun questions the inappropriate structure of the Federal Reserve’s dividends.
From the article:
The [Federal Reserve’s] shareholders are the commercial banks that are the members of the respective Federal Reserve Banks. Remarkably, these private shareholders are getting dividends from the Reserve Banks even when the combined Fed has no profits, no saved up past profits (retained earnings), and hugely negative actual capital. Any private bank which tried to pay dividends under these circumstances would be sternly prohibited by the Fed from doing so.
Read the full article here.