“This does not happen very often: the 12 presidents of Federal Reserve Banks have spoken with great clarity and in public on a financial reform issue: the need to change the rules for money-market funds. They are explicitly taking on the biggest banks and their allies, including some recalcitrant officials.

“While this will be a long haul – and these central bankers need a lot of external support – we are starting to see some progress toward building a new, more skeptical understanding of how the financial system works.

“As far as I have been able to determine, the comment letter submitted on Feb. 12 by the Federal Reserve Bank of Boston – on behalf of all the regional Fed banks – was literally the first time these 12 organizations have spoken with one public voice without involving the Fed’s Board of Governors.

“The Federal Reserve System – 100 years old this year – has a curious legal structure. The system comprises a very powerful Board of Governors and the 12 regional banks, with each of the latter nominally owned by member banks in its region. (Before the 1930s, the Washington-based board was less important, and the New York Fed was arguably the most powerful element of the system; see Liaquat Ahamed’s brilliant Pulitzer Prize-winning history of that period, “Lords of Finance: The Bankers Who Broke the World.”)”

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Read Simon Johnson’s full New York Times article here