How the Fed can save the earth

For those who have long forgotten macroeconomics 101, the Fed and its kin perform a number of important functions, none more important than promoting the stability of the U.S. financial system by minimizing and containing systemic risks. It has a number of tools — carrots and sticks — to do that, from adjusting interest rates to supervising and regulating banks to ensure the safety of the U.S. financial system and to protect consumers’ credit rights.