You expect your money to be safe in a bank, but if the Federal Reserve gets its way, that may not be the case soon.
That’s because the Fed, which has a tremendous amount of regulatory power over the nation’s financial institutions, has begun using its authority to put politics before fiscal stability. If the Fed’s New Year’s resolution was to destabilize America’s financial system, it’s off to a great start.
The Fed conducts stress tests of financial institutions to determine those firms’ solvency and the systemic risk they may pose to the rest of the financial system. This is done because all financial institutions are leveraged to some extent, meaning they have assets with a level of risk. This was clearly seen in the wake of the housing meltdown starting around 2007.
