I would like to begin by complimenting the authors of this highly interesting paper for their systematic approach to thinking about a wide-ranging and difficult set of issues. After a period during which the Treasury’s debt management needs dominated Federal Reserve policies, the Fed began to regain its independence with the Treasury-Fed Accord of 1951.
But although there were limitations in regulatory capacity, the major and more decisive weaknesses were readily seen to be the inadequacies of the legislation itself.” Unfortunately, the collapse of several finance companies and trust and mortgage finance companies was not averted.