Congress Loses Faith in the Fed Reserve—Strips Additional Authority from New Financial Regulation

[The Straight Story]

Congress Loses Faith in the Federal Reserve—Strips Additional Authority from New Financial Regulation
September 10th, 2009 • Related • Filed Under • by admin


The Federal Reserve was to play a major role in the Obama Administration’s proposed regulatory overhaul of the financial system, but Congress may stand in the way. Many Senators have lost confidence in the Federal Reserve and are now moving a different route for financial regulatory reform.

A new piece of legislation taking shape in the Senate’s Banking Committee would give the Federal Reserve far less authority than the Obama administration had originally thought when it proposed the reforms that it had unveiled in June. Why the change? Senators from both sides of the aisle have lost confidence in the Fed in the wake of the worst financial crisis since the Great Depression, challenging every from the central bank’s lack of transparency to its ability to protect consumers.

Many Democratic lawmakers oppose giving the Fed responsibility for monitoring systemic risk in the economy as the Obama administration has proposed, favoring instead in vesting that authority to a group of regulators or to other agencies.

However, not all are sold on the financial regulatory overhaul. Many criticize the plans being developed as too constricting and overreaching, saying that some of the proposed changes would cause many financial institutions to fail, preventing individuals and small businesses from getting any form of credit.

http://www.americanbankingnews.com/2009/09/10/congress-loses-faith-in-federal-reserve%E2%80%94strips-additional-authority-from-new-financial-regulation/

[dixiegrrrrl]

1. I hope you post updates to this important issue.

:hi:

[Statistical]

2. The fed has one job and one job only.

Fed regulates money supply to avoid inflaiton and deflation. Period.

That is a massive undertaking already.
Slapping extra crap on the Fed that may be contrary to their core mission is a recipe for disaster.

Fed should not be a political organization. Fed is the central bank and controls interest rates to create an orderly economic expansion.

No reason for Fed to do anything else. Central bank needs to be completely (100%) detached from short term political manipulation.

[Metta]

3. So, any regulations will make the sky fall. Where have we heard that before?

Happy karma to those who support that line of thinking.

[DCKit]

4. That's not what they're saying. They just don't want to give those powers to the Fed.

And I couldn't agree more. Everything they've done to date has been tainted and their staff has been a revolving roster of former/future Goldman Sachs employees.

Leave it to government regulators (then demand they do their jobs or be fired).

[TheKentuckian]

5. Kill the Fed, I sez!!!

One of the biggest scams in history.

[Trillo]

6. Thanks. I missed this one earlier.

Maybe this relates to Obama's upcoming financial speech.