Conspiracy Theorists Ask ‘Who Owns
the New York Fed?’ Here’s the Answer.
Over 100 years later, we finally get the answer. Luckily for us, Western hegemony is underpinned by the LIE that freedom, justice, and equality of opportunity exists for CHOSSA (Children of Stolen and Sold Africans) in the Americas. It is a lie that has inflicted a poisonous bite into, as my dad would say, the Americas’ “hind parts.”
I have been hammered, mercilessly, for so many years, by people (including my 2 ex-wives and my 7 children) who think I am a ‘conspiracy nut’ regarding my belief that economics governs politics, and my belief that UK and US Banking Cartels control the cost and supply of the world’s currency. Ironically, and thankfully, The Freedom of Information Act is the last nail in Capitalism’s coffin.
On February 24, 2020, I was blessed (I am an atheist) to receive an incredible birthday present. That day, Institutional Investor published the above headline, and the following story by Richard Teitelbaum.
The question comes from foil-hatted conspiracists, good government advocates, and sober academics: Who owns the New York Federal Reserve Bank?
For context, it needs to be mentioned that the New York Federal Reserve Bank is one of twelve privately owned Regional Federal Reserve Banks that comprise the Federal Reserve System, the Central Bank of the United States. Yes, the Central Banking System of the United States is owned by private corporations which are privately owned by individuals), not federal instrumentalities of the United States government.
“Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA but are independently owned and locally controlled corporations.” — Lewis v. U.S. (Ninth Circuit Court)
By the way, I am a sober academic. And if you doubt me, challenge me. I will be 77 years old in 13 days, so make sure you come with truth, based on your own personal experiences. Age is an important factor in life’s learning process. That’s why the Mormon Church requires its President, and his two Apostles in the Presidency to be 80 years of age.
Presently, Russell M. Nelson and his top two counselors who form what the Mormon Church calls “the first presidency” are 97, 89 and 88 year-old white men, all older than President Joe Biden, 79, and Pope Francis, the 85-year-old leader of the Catholic Church. I’m not at their age yet, so I know that I have a lot of learning to do, and so do you. Sorry to digress. It’s my age. 😊
Under the Federal Reserve Act of 1913, each of the 12 regional reserve banks of the Federal Reserve System is owned by its member banks, who originally ponied up the capital to keep them running.
The number of capital shares they subscribe to is based upon a percentage of each member bank’s capital and surplus.
But the New York Fed — by far the most important of the regional banks — as a matter of policy has previously not disclosed the capital share holdings of its 70-plus member banks. A New York Fed spokeswoman in September declined to comment on the record about the matter.
“To the best of my knowledge, we haven’t had a handle on who owns the capital stock of the New York Fed,” says Connie Razza, chief of campaign and policy at the Center for Popular Democracy, an advocacy group that has pushed for greater transparency.
Now, thanks to a Freedom of Information Act request filed late last year by Institutional Investor, we know the truth.
II asked the New York Fed for the capital stock holdings of its members as of year-end 2018, as well as for each year going back to 2007. The bank responded with copies of what it calls its Capital Stock Master Report, a compendium of shareholdings of member banks, for each of those years.
The big reveal for year-end 2018: Citibank, the №1 institution on the roster, held 87.9 million New York Federal Reserve Bank shares — or 42.8 percent of the total.
The №2 holder stockholder was JPMorgan Chase Bank, with 60.6 million shares, equal to 29.5 percent of the total. In other words, the two banks together control nearly three-quarters of the regional bank’s capital shares.
But does share ownership matter? You bet it does, but based on the maze they have created, you will have to work hard to get through it.
Each bank, after all, has only one vote when it comes to electing bank directors (their only shareholder responsibility) regardless of stock holdings. And New York Fed shares cannot be traded, shorted, or pledged as collateral. [What about selling them to other members?”]
…From Citibank and JPMorgan, there is a steep drop off in shareholdings. Bulge bracket rivals hold far fewer shares, with Morgan Stanley Bank owning 4.8 million and its affiliate Morgan Stanley Private Bank 2.8 million shares, for a combined 3.7 percent stake in the New York Fed.
Goldman Sachs Bank USA owned 8.3 million shares, equal to 4 percent of the total, and Bank of New York Mellon held 7.2 million shares, or 3.5 percent.
It may surprise observers that some big holders are affiliates of foreign banks: HSBC Bank USA, part of London-based HSBC Holdings PLC, owned 12.6 million shares, or 6.1 percent, of the New York Fed’s total. Deutsche Bank Trust Co. Americas was the owner of 1.7 million shares, and Deutsche Bank Trust Company 60,678 shares, for a combined 0.87 percent stake.
Mizuho Bank (USA), an affiliate of Tokyo-based Mizuho Financial Group, owned 819,344 shares. Industrial & Commercial Bank of China held 221,278 shares.
…Still, it serves as yet another red flag for those concerned with the power of too-big-to-fail banks that the top two banks hold nearly three-quarters of the New York Fed’s capital shares.
“It’s surprising to see how concentrated it is,” says Razza. That lopsided ownership hasn’t changed much since the financial crisis: In 2007 JPMorgan owned 41.7 percent of the New York Fed’s shares and Citibank 36.6 percent, a combined 78.3 percent
The amount of share ownership plays no explicit role in the complex electoral system that determines the make-up of the New York Fed’s board. That’s what their mouths says, but it is far from the truth. It is a complex electoral system, deliberately designed to be so. Mr. Teitelbaum’s story continues.
A refresher: The nine-person NYFRB board is divided into three classes of three members each.
Banks elect three class A directors to represent their own interests. The same banks also elect three class B directors to represent the interests of the public. [How about letting the public choose who represents them.] The three class C directors, including the New York Fed’s chairperson and deputy chairperson, are also designated to represent the public interest and are selected by the Federal Reserve Board of Governors in Washington. [The Board of Governors are told they must include the New York Fed’s chairperson and deputy chairperson in their choice of class C directors, who are also supposed to represent the public interest. What a joke? Where is Dave Chappelle when we need him?] Mr. Teitelbaum continues.
One mystery is why the New York Fed would not freely disclose stock ownership to begin with, given that the information can be estimated with some accuracy using public data from the Federal Deposit Insurance Corp. and other sources. They want to keep you guessing, rather than tell you the truth, which exposes their lies.
The peculiarity of these board elections may endow New York Fed stock ownership with more importance than is initially apparent, says economics professor Andrew Levin of Dartmouth College.
The member banks are divided into three categories — group one for banks with more than $2 billion in capital and surplus (like Citibank and Goldman Sachs Bank), group two for those with between $40 million and $2 billion (like Safra National Bank of New York and Bessemer Trust Company) and group three for banks with less than $40 million (like Tioga State Bank, and Brown Brothers Harriman National Trust).
Group one banks vote for one particular designated class A director as well as one class B director. The group two and group three banks similarly vote for one class A and class B director each. I know its hard to follow, much less understand, but it is easy to see through the maze once you accept that the process is a ruse to disguise who the controlling powers really are. Here is what Teitelbaum’s article reveals.
“Given that the ballot has invariably had only a single candidate for each director, there’s room for doubt about whether some big banks might be playing a key role behind the scenes in selecting those candidates,” says Levin, who has served as a special advisor to the Federal Reserve Board in Washington. “There needs to be greater transparency about how that candidate is selected.”
Levin adds: “No one knows whether the selection process may be subject to pressures or influences behind the scenes.” The process, he says, is “like a Soviet election.” [Seriously, who do you think taught the Russians?]
Why is the New York Fed freely disclosing the shareholding figures now?
The bank, as a privately-owned institution, says on its website that it is not subject to FOIA requests like that made by Institutional Investor — although it says it will seek to comply with the spirit of the law, which it did in this case.
How do you like that ‘swing’ move? “The bank, as a privately-owned institution, says on its website that it is not subject to FOIA requests like that made by Institutional Investor.” What did the New York Federal Reserve Bank say? Because they are not a Federal Agency, they are not subject to Federal Law? They weren’t stupid enough to try that one in a Federal Court.
Following the blowback from the 2008/09 financial crisis, there has been a reassessment of the New York Fed’s reflexive cloak of secretiveness, both internally and on the part of legislators. The opacity of the Wall Street bailout, via its takeover of American International Group, in particular elicited calls for more transparency.
…And the newly elected New York Fed president, former San Francisco Fed president John Williams, in one of his first statements pledged openness and transparency.
“The Fed is facing a difficult challenge,” says George Selgin, director of the Center for Monetary and Financial Alternatives at the Cato Institute in Washington, D.C. “It’s trying to become more transparent while its operations become more complex. That’s difficult trick to pull off.”
There may just be other forces at work.
Yes, there are other forces at work, but “Think Tanks” are for another day.
If my writing interests you, I hope you will pass it on to the folks who follow you, and also to the folks who you follow. I don’t write for money. My books that offer insight into who I am, and what I am about, including full details for the implementation of Equism, are free. They can be found at my blog equism.net. Please go to the Tab Links to Books, and click on either one, or both, for you perusal and assessment. I await your response.