Bummer have to pay to read that article.

Glad to hear the Fed is studying risks of systems that have been in place for years...  Almost like they are doing their job

Forgive me if you already know what follows. Most people don't.

The Federal Reserve is not a government regulatory agency. It is a coalition of banks. The name makes it sound like something different from what it is and many people assume it is a branch of the federal government. The Fed is studying the risks to its members in the banking industry, which is to be expected. We can also expect them to use their influence with government to push back any risks they perceive - such pushback may or may not be in the public interest.

From the FAQ on the Fed's site: "It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms."

http://www.federalreserve.gov/faqs/about_14986.htm

My paraphrase of that is "You can't touch us - and nobody else can either."

The fact that the Fed has a dot-gov domain name for the very site in which it asserts its independence from government adds to the murkiness of the situation.

Lest we forget what they are about, here's that famous quote from Bernanke: “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing,”

http://blogs.wsj.com/economics/2010/12/22/is-the-fed-printing-money/

Of course, the "potential risks" of alternative systems are always emphasized, never the benefits.  Authorities must always keep the river of fear flowing.

Perhaps some fearless reporter should've pointed out to Mrs. Yellen that central banks themselves are pretty much the greatest systemic risk generators in the history of mankind.  I think many people worldwide would prefer to see the Fed actually start "studying" the risks of its own eternally-debasing, moral-hazard-inducing, serial-bubble-blowing monetary policies before it goes off and starts looking at "risks" in other systems.

you'd have to be honest to do that.

No it is absolutely NOT their job. Their job was simply the stability of the US dollar FRN (and secondarily the banking system) ... and at that simple task they have abjectly failed, it has lost 99% of its value since 1913.

Irony noted, but there is some wry truth to it because of the Fed's other self-declared mandate to keep employment high. One way to interpret that is 100 years of wage-slaves chasing ever-retreating rewards - much too busy to think of much else. Mission accomplished.