Why Can’t the Fed Refuse to Loan Money to Banks That Pay Lavish Salaries?

Question: Why can’t the Federal Reserve refuse to loan money — at practically no interest — to banks that give their executives lavish salaries and bonuses?

Paul Solman: You tell me. I think they’d say it wasn’t allowed. But as far as I can tell, the Fed did plenty of things it wasn’t explicitly “allowed” to do during the crisis.