Okay, the banks borrow from the feds only for certain specific purposes they are not in general funded by the fed. The feds in turn have bank examiners - probably not enough - that are supposed to check the bank's accounts periodically to make sure everything is on the up and up.
Under your plan edit basically the fox would be guarding the hen house. Forgive me for being a bit leary. And what you don't know about the banking industry would and probably has filled books.
What you don't know is that the people who own the Federal Reserve & Oil Companies are called the Robber Barons and they own this country.
What's the saying? "give me control of a countries $ and I don't give a shit who runs the government".