Spread the Fed: Distributed Central Banking in Pandemic and Beyond

33 Pages Posted: 11 May 2020 Last revised: 30 Mar 2023

Date Written: May 10, 2020


I propose both an interpretation of and an institutional optimization plan for the broad array of new Fed Liquidity Facilities announced in response to the Coronavirus Pandemic of 2020. These represent an attempt by our central bank to fund concerted state and municipal action as if it were federal action – a mode of action gone AWOL during the Trump occupation of the White House. In one sense this necessity is regrettable – tens of thousands are dying, while the need of vigorous federal governance is what prompted our Constitution in the first place. In another sense, however, the conundrum is simply the latest iteration of our republic’s perennial ambivalence over financial and political federalism alike, and accordingly yields an opportunity: That is to re-distribute our once-distributed Fed’s functionality across its more locally attentive subsidiaries, as envisaged in the Federal Reserve Act of 1913.

Keywords: Central Banking, Constitution, Coronavirus, COVID-19, Fed, Federal Reserve, Federalism, Finance, Financial Regulation, Fiscal Federalism, Monetary Federalism, Money, Pandemic

Suggested Citation

Hockett, Robert C., Spread the Fed: Distributed Central Banking in Pandemic and Beyond (May 10, 2020). 15 Va. L. & Bus. Rev. 89 (2020-2021), Available at SSRN: https://ssrn.com/abstract=3597724 or http://dx.doi.org/10.2139/ssrn.3597724

Robert C. Hockett (Contact Author)

Cornell University - Law School ( email )

Myron Taylor Hall
Cornell University
Ithaca, NY 14853-4901
United States

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