Is the Fed stupid?

I doubt it.

The editors if Bloomberg View write that the Fed’s latest stress tests for systemic risk in banks are too lenient and employs unrealistically simple kind of stress. They compare the Fed’s weak methodology to better stress tests by NYU researchers and the Bank of Canada to prove their point.

So is the Fed stupid? I doubt it. But if the BoC and NYU have better methods, why didn’t the Fed just adapt those? The only possible explanation here is that the Fed deliberately eschewed a superior methodology. So why did they do that? Is our government that corrupted by the power of big banks? We’ve seen it before with the FDA an USDA. But if the Fed is in fact in the pocket of the big banks then we are so screwed it doesn’t even matter anymore.


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