If The U.S. Federal Reserve follows through with its plans to create a real-time payments system, it will be costly, and might not work.
Ned Ryun, Founder and CEO of national grassroots organization American Majority, doesn’t mince words when he says that the Fed “had plenty of opportunities over the years to try to update” the transfer of payments between American financial institutions.
While there are things that the US government does well – the US military is one shining example – the government has a history of falling short of their goals when it comes to innovation and technology, argues Ryun. “Remember the Obamacare online system? Or the ‘virtual fence’ along the U.S. Mexico border? Or the IRS’ computer network?,” he recalls in an op-ed entitled “The Fed Shouldn't Be Competing With the Banks It Regulates” for Real Clear Markets. “We’ve seen this situation play out many, many times before, and it never ends well for the American taxpayer.”
As Ryun puts it, redundancy will not be a help to the U.S. banking systems:
But now, the Federal Reserve – seeking to find a way to keep its bloated and outdated bureaucracies relevant – is considering potentially investing hundreds of millions of taxpayer dollars in its own real-time payments system: in essence, creating a second, redundant system that will take years to deploy all while saddling taxpayers with the cost of it.
As the entity that writes passes the laws that oversees the U.S. banking sector, Congress has a role to play. Representatives and senators “should make it clear to the chairman that the Fed should remain focused on ensuring our economy remains healthy and growing, and leave the innovation to the private sector businesses that contribute to that growth.”
Read Ned Ryun’s entire op-ed at Real Clear Markets.