First, let’s talk about what the New York Fed has been doing. What kind of natural disaster would be bad enough to completely shut down the operations of the New York Federal Reserve Bank? It would have to be something very unusual, and apparently the New York Fed is very concerned that such an event could happen. According to Reuters, the New York Fed has been transferring personnel to Chicago and building up its satellite office there just in case a “natural disaster” makes it impossible for normal operations to continue in New York…
The New York branch of the U.S. Federal Reserve, wary that a natural disaster or other eventuality could shut down its market operations as it approaches an interest rate hike, has added staff and bulked up its satellite office in Chicago.
Some market technicians have transferred from New York and others were hired at the office housed in the Chicago Fed, according to several people familiar with the build-out that began about two years ago, after Hurricane Sandy struck Manhattan.
Officials believe the Chicago staffers can now handle all of the market operations that are done daily out of the New York Fed, which is the U.S. central bank’s main conduit to Wall Street.This seems very odd.
In all of U.S. history, there has never been a natural disaster in New York City that would have been bad enough to totally shut down the operations of the New York Fed for an extended period of time.
So why are they so concerned?
Well, I can think of one event that could cause such a disruption…
An east coast tsunami.