It's good to see Federal Reserve officials voicing their opinions, unlike Congress who hardly says anything about this radical change for the worse. By bailing out Wall Street the Fed is only encouraging more gambling and more risky behavior. For the millionth time, where are the sacrifices by Wall Street? How are they really changing their behavior? We deserve answers and so far Wall Street isn't saying anything and Congress isn't asking.
The comments by Richmond Fed President Jeffrey M. Lacker reflect a concern among people within the central bank and close to it that the emergency actions taken over a single weekend in March may have fundamentally recast the role of the institution -- but without the lengthy, deliberative process that normally would precede such a move.
"The danger is that the effect of recent credit extension on the incentives of financial market participants might induce greater risk taking," Lacker told the European Economics and Financial Centre in London, "which in turn could give rise to more frequent crises, in which case it might be difficult to resist further expanding the scope of central bank lending."
