Bernanke to Wage Fresh Battle for Fed Powers

Tuesday, 16 Mar 2010 10:59 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Federal Reserve Chairman Ben Bernanke plans to wage a fresh battle against Senate efforts to scale back the Fed's role in supervising the nation's banks.

In testimony prepared for a House hearing on Wednesday obtained by The Associated Press, Bernanke argued that the Fed factors in information it gets from its role as a regulator into its decisions on interest rates. And, Bernanke said its banking duties give the Fed insights into the health of the entire banking system.

"The insights provided by our role in supervising a range of banks, including community banks, significantly increases our effectiveness in making monetary policy and fostering financial stability," Bernanke said in his prepared remarks to the House Financial Services Committee.

Bernanke's testimony comes as the Fed faces a significant shift in its supervisory duties.

In his effort to overhaul the nation's financial regulatory structure, Senate Banking Committee Chairman Christopher Dodd, D-Conn. has offered legislation that would strip the Fed of its power to supervise state-chartered banks and bank holding companies with assets of less than $50 billion.

That would leave the Fed with 35 of the biggest bank holding companies under its supervision. Dodd's bill, however, would also give the Fed new powers to oversee nonbank financial firms that are so large and interconnected that their failure could pose a risk to the economy.

Such firms could include insurance giant American International Group Inc., or General Electric Co.'s GE Capital.

But with its narrower authority, the Fed's system of 12 regional banks could face profound changes. The Kansas City Federal Reserve Bank and the St. Louis Federal Reserve Bank, for instance, would have no banks under their supervision.

The Obama administration has supported a broader supervisory role for the Fed.

Dodd's bill would also place an independent consumer watchdog inside the Fed. The Consumer Financial Protection Bureau, however, would have its own director appointed by the president and would not fall under the authority of Bernanke.

The administration has called for a freestanding consumer agency, an approach that would strip the Fed of its consumer-protection responsibilities. The House-passed version of a financial revamp hues to the administration's approach. Bernanke has argued that despite past weaknesses, the Fed should retain its consumer-protection duties. He didn't address the matter in his testimony prepared for Wednesday.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

IRS Finds 30,000 Lois Lerner Emails, Enraging Conservatives

Friday, 21 Nov 2014 21:45 PM

Five months after the Internal Revenue Service deemed that emails sent by former official Lois Lerner had been lost fore . . .

Hillary Clinton Backs Obama Immigration Move

Friday, 21 Nov 2014 21:27 PM

Hillary Rodham Clinton voiced support Friday for President Barack Obama's use of executive actions to protect about 5 mi . . .

Report: NYT Suppressed Kerry's Denunciation of Palestinians

Friday, 21 Nov 2014 21:00 PM

Earlier this week, Secretary of State John Kerry delivered an impassioned denunciation of the terrorist massacre of five . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved