“Fractional reserve banking underpins the entire banking system, yet its effects on society are completely ignored,” Paul stated. “Our financial system consists of vast amounts of credit pyramided on top of very small amounts of real savings– all backstopped by explicit and implicit government guarantees. This poses significant risks to the stability of the economy and monetary system, which ought to give pause to any serious observer of financial markets.”
“Hopefully this hearing will create a greater understanding among the American people about the nature of the banking system, and begin the movement towards serious systematic reform,” Paul continued. “The American people deserve a financial system that is stable and efficient; one that operates without taxpayer subsidies and bailouts.”
The hearing, entitled “Fractional Reserve Banking and the Federal Reserve: The Economic Consequences of High-Powered Money,” will be held on Thursday, June 28, at 2:00 p.m. in room 2128 of the Rayburn House Office Building.
Witnesses scheduled to testify:
– Dr. John Cochran, Emeritus Professor of Economics and Emeritus Dean, School of Business, Metropolitan State College of Denver
– Dr. Joseph Salerno, Professor of Economics, Lubin School of Business, Pace University
– Dr. Lawrence H. White, Professors of Economics, George Mason University