Central Banks, The Veil Of Secrecy, A Hotbed of Corruption, And Now Another One Got Ensnared

Central banks are designed to be “independent,” and they shroud themselves in secrecy. But they have formidable and, when it comes to money, “unlimited” powers that they harness for the benefit of their clientele, banks. And hiding behind their veil of secrecy are shenanigans that rarely seep to the surface, but when they do, they just get worse and worse. And the latest is a sordid bribery and kickback scandal at the Reserve Bank of Australia (RBA) that appeared to be neatly contained to two subsidiaries, until now.

Central banks are special creatures, and investigating them turns out to be the hardest thing in the world. While pressures have been rising for an independent inquiry, Parliament voted against it last year, and may do so again.

But the RBA is not alone. Similarly sordid allegations have entangled Ewald Nowotny, Governor of the Austrian National Bank and member of the ECB’s Governing Council [read... Austrian Central Bank: Bribery, Kickbacks, Money Laundering]. At the Swiss National Bank, an insider trading scandal caused its chairman, Philipp Hildebrand, to resign. And in the US, an audit of the Federal Reserve System by the Government Accountability Office shed some light on the dizzying conflicts of interests and cronyism at the New York Fed when it decided who got which billions during its multi-trillion-dollar bailout mania [read.... The GAO Audit of the Fed Doesn’t Call It ‘Corruption’ but it Should].

Piercing the veil of secrecy surrounding central banks is tough. While Ron Paul [His Legacy, A Complete Fed Audit?] and others have long pushed for regular Fed audits, not much has been accomplished beyond the GAO audit. Inspector General Neil Barofsky was looking after TARP to prevent fraud and abuse, though it was handing out peanuts compared to the trillions the Fed was handing out—secretly and unobserved. Read.... All Heck Breaks Loose on CNBC, TARP Gets Sanctified, Bank Bailouts Get Whitewashed, And The Fed Escapes Scot-Free.

And here’s a central-planning debacle skidding towards its endgame: to stave off another collapse, the government in Argentina is imposing ever more trade barriers and capital restrictions. Read.... Argentina’s Creeping State Control, by stilettos-on-the-ground economist Bianca Fernet.

By testesterone pit