William C. Dudley is President and Chief Executive Officer of the Federal Reserve Bank of New York. This post is based on Mr. Dudley’s recent remarks at the Annual Meeting of the Virginia Association of Economists; the complete speech, including footnotes, is available here. The views expressed in this post are those of Mr. Dudley and do not necessarily reflect those of the Federal Open Market Committee or the Federal Reserve System.
It is a great pleasure to have the opportunity to speak here today [March 31, 2016] as part of the Virginia Association of Economists annual meeting at Virginia Military Institute and Washington and Lee University. This is an appropriate setting for the topic I will be addressing—the role of the Federal Reserve as the central bank of the United States. When the Federal Reserve Act was enacted in 1913, H. Parker Willis, who had been a professor at Washington and Lee University, played a critical role. He worked closely with Representative Carter Glass of Virginia in crafting the legislative proposal that established the Federal Reserve, and Willis became the first Secretary of the Federal Reserve Board in 1914.
Of course, I’m tackling this subject today not just because H. Parker Willis was a professor here in Lexington. Instead, I’m addressing this issue because of the ongoing debate about the role of the Federal Reserve and its structure and governance. My purpose is to demystify the nation’s central bank and to respond to some of the critiques that we continue to face. I see this as necessary because there is a risk that the Federal Reserve could be changed in ways that might impair our ability to achieve our primary objectives—namely, full employment and price stability. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.