Here we see yet another attempt to give the Fed broader control over our financial system and economy.
Remember – these are the very same people who are destroying our economy.
Also take note of who is supporting this legislation – Barney Frank and Timothy Geithner. Who is standing up for the American people? Not these guys.
You’ll notice that this idea to give the Fed more authority never goes away. If a proposal to increase Fed authority is strongly opposed – it gets repackaged and submitted another way. You are watching some very evil people in the shadows orchestrate these things.
Ron Paul has proposed legislation to audit the Federal Reserve – and not surprisingly – the Fed opposes this legislation. Why? The Fed would tell you that an audit would somehow threaten the stability of the financial system. We know this to be untrue. The real reason is that they do not want their lies and actions exposed to the world.
This battle for control of our financial system is going to get much more heated (and more dangerous) in the months/years ahead. Who will win the battle? As always – it will depend on the American people. We will decide. Will we wake up and stand against this beast or will we succumb to it?
jg – October 29, 2009
OCTOBER 28, 2009, 9:21 P.M. ET
Congress Weighs Scope of Fed's Authority
By SUDEEP REDDY
WASHINGTON -- Get ready for a fiery debate about the role of the Federal Reserve.
The latest financial-regulation legislation moving through Congress would give the Fed new oversight powers, including the authority to force large firms to shrink if their size threatens the broader economy.
The draft bill, released this week by House Financial Services Committee Chairman Barney Frank (D., Mass.) gives the central bank more direct authority than outlined in a proposal earlier this year.
The expansion of the Fed's role is sure to become a flash point in the debate over the overhaul of financial regulations.
On one side are Mr. Frank and Treasury Secretary Timothy Geithner, who favor giving the Fed broad authority. On the other side are lawmakers who want power spread out among agencies. Many also charge that the Fed's regulatory missteps helped to cause the financial crisis.
Mr. Geithner and major bank regulators will discuss the proposed legislation when they testify before the House Financial Services panel on Thursday.
In the Senate, where financial regulation is moving at a much slower pace, members of both parties have spoken out against giving the Fed significant new authority.
Senate Banking Committee Chairman Christopher Dodd doesn't think the Fed "did a particularly good job in using its authority leading into the financial crisis," his spokeswoman said Wednesday. Mr. Dodd is also concerned that if the Fed is stretched too thin, it "won't necessarily focus on monetary policy," she said.
Even Democrats more sympathetic to the central bank, such as Sen. Mark Warner of Virginia, have indicated they would like to put more authority in a council of regulators, rather than in the central bank.
Fed officials have repeatedly said they can handle multiple roles. They have acknowledged lapses in consumer protection over the past decade—not preventing the worst abuses in mortgage underwriting, for example. They have also acknowledged faults in monitoring banks' financial positions ahead of the crisis. But they maintain that the Fed's posture has changed and it will be far more vigilant down the road.
"The Fed is everybody's favorite pinata today for its obvious mistakes," said Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law.
In a bid to mollify Fed critics, the draft legislation would create a council to share oversight authority. The council would be led by the Treasury secretary and include at least six regulators. It would identify activities that should be subject to greater supervision, issue recommendations and develop tougher rules if the activities threaten firms or markets.
The Fed would gain ultimate "backup authority" as a regulator that could step in if the council did not take action.
Under current law, the Fed can force a depository institution within a bank holding company to sell assets. The new law would greatly broaden that authority.
The plan would also put a Fed governor on the five-member board of the Federal Deposit Insurance Corp., replacing the head of the Office of Thrift Supervision, which would be phased out. The FDIC, with the approval of the Fed and Treasury, would be empowered to make loans or offer guarantees to financial firms to prevent financial instability.
"The broader task of monitoring and addressing systemic risks that might arise from the interaction of different types of financial institutions and markets—both regulated and unregulated—may exceed the capacity of any individual supervisor," Fed Chairman Ben Bernanke told a House committee earlier this month.
"We should seek to marshal the collective expertise and information of all financial supervisors to identify and respond to developments that threaten the stability of the system as a whole," Mr. Bernanke said.
Separately, the House Financial Services Committee Wednesday passed a bill that would tighten the Securities and Exchange Commission's oversight of credit-rating firms by establishing an office to review the firms and their ratings. It would also make it easier for investors to win civil lawsuits against raters that "knowingly or recklessly" issue poor-quality ratings.
The committee is expected to vote next week on a comprehensive investor-protection bill that includes an amendment giving the SEC authority to adopt rules to allow shareholders to nominate board members on corporate ballots, known as proxy access. Business groups have suggested they would sue the SEC if it moved ahead with proxy-access rules under its existing administrative rules. The amendment would put the SEC on firmer legal ground.
—Kara Scannell contributed to this article.
Write to Sudeep Reddy at email@example.com