Document Type
Book Review
Publication Date
Winter 2025
Abstract
Throughout his tenure as chair of the Federal Reserve Board, Marriner Eccles pressed President Franklin D. Roosevelt to overhaul bank supervision. Eccles eventually made his ongoing service as chair contingent on FDR agreeing to support the effort. This initiative is commonly depicted as a power grab. Federal bank regulation and supervision, then and now, is divvied up among three agencies, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Comptroller of the Currency. Eccles wanted the Fed, and the Fed alone, to be the federal bank supervisor. Having already succeeded in enhancing his power once, by spearheading reforms that increased the authority of the Federal Reserve Board, Eccles sought to replicate his success and expand his domain yet further, or so the tale is often told.
In Private Finance, Public Power: A History of Bank Supervision in America, Peter Conti-Brown and Sean Vanatta show that this is just one piece of the story, and the full account provides valuable insights into this phenomenon called supervision. Understanding the rationale behind Eccles’s ambitions also holds lessons for the current moment, revealing just how powerful and malleable bank supervision can be, why the industry’s current effort to remake supervision could backfire, and why those taking up arms to defend supervision may come to regret that decision.
Conti-Brown and Vanatta show that supervision is a powerful tool. It can and often has been used to meaningfully enhance the health of banks and the banking system. Yet they further show that it can and has been used to serve other agendas as well, potentially making it very attractive to an administration looking to deploy such tools in new and sometimes self-serving ways.
Disciplines
Banking and Finance Law | Law
Recommended Citation
Kathryn Judge, The Politics of Bank Supervision: From Eccles to Bessent, IX(4) Am. Aff. 11 (2025).
https://americanaffairsjournal.org/2025/11/the-politics-of-bank-supervision-from-eccles-to-bessent/
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/4765
Comments
Private Finance, Public Power: A History of Bank Supervision in America by Peter Conti-Brown and Sean H. Vanatta, Princeton University Press, 2025, 424 pages.