Tuesday, March 16, 2010
Fed's Authority Threatened
This is a very interesting article that goes over Federal Reserve Chairman Ben S. Bernanke's arguments against Senate Banking Committee Chairman Christopher Dodd's proposal to shrink the Fed's authority. The proposal's purpose is to change thins so the that the Fed only oversees financial institutions with over $50 billion in assets. Bernanke argued back saying that neither monetary policy nor the financial system will function properly if the bank does not have influence over all financial institutions. Several Federal Reserve representative already spoke on behalf of the central bank defendind Bernanke's position.
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It would be quite interesting to see the effect of removing much of the central bank's supervisory role. After the recession that led to the collapse of our economy much of the blame has to rest with the Federal Reserve and how they responded. I think it is time we take a serious look at revamping financial regulations to prevent a repeat of the crisis that prompted billions of taxpayer's dollars to bailout numerous firms such as Citigroup Inc.
ReplyDeleteI agree with Taleb, change might be the answer we need right now. It seems that the problem is that the banks have the majority influence over all financial institutions. It will be interesting to see if this happens.
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