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Friday, March 5, 2010

Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt'

Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt'
Shahien Nasiripour
First Posted: 03- 3-10 07:00 PM | Updated: 03- 4-10 04:35 AM

One of the world's leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt."

Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.

"If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York. "It's time for us to reflect on our own structure today, and to say there are parts that can be improved."

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