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 sudeep.reddy@wsj.com
Showing posts with label Barney Frank. Show all posts
Showing posts with label Barney Frank. Show all posts
Friday, September 15, 2006
Fed Gets More Power & Responsibility - July 15 2010
Our wonderful leaders (actors) put on a grand show that would lead us to believe they would fight for the American people – and in the end – we see the truth.
Once again – we hear lots of rhetoric that the Federal Reserve’s power will be reduced (talk).
Once again, the Federal Reserve gains more power over us (actions).
We need leaders that are concerned about the future of the United States of America – not how good they look on camera.
jg – July 15, 2010
_________________________
JULY 15, 2010
Fed Gets More Power, Responsibility
By LUCA DI LEO
After fending off most challenges to its independence and winning new powers to oversee big financial firms, the Federal Reserve has emerged from a bruising debate on the overhaul of U.S. financial rules as perhaps the pre-eminent regulator in the sector. But that could only bring it added blame if things go wrong again.
Just a few months ago, amid populist anger at the Fed for failing to prevent the financial crisis of 2008 and bailing out Wall Street, Congress was talking of stripping the central bank of its supervisory oversight of banks or forcing it to submit to congressional audit of its interest-rate decisions.
Instead, the new law gives the Fed more power and a better tool box to help prevent financial crises. It will become the primary regulator for large, complex financial firms of all kinds, such as American International Group, the insurer which built a massive derivatives portfolio that regulators didn't see until it was too late.
Congress approved a sweeping rewrite of rules that touch every corner of finance in the biggest expansion of government power over banking and markets since the Great Depression. David Wessel, David Reilly and Al Lewis discuss the likely impact of Dodd-Frank.
This isn't the first time Congress has expanded the Fed's role. After the Great Depression, it passed the Employment Act in 1946, charging the Fed with averting the huge unemployment seen in the 1930s. After the double-digit inflation of the 1970s, the Fed was formally given a dual mandate of promoting both price stability and maximum sustainable employment. In the wake of the latest financial crisis, the Fed is effectively being told to add the maintenance of financial stability to its responsibilities.
The risks, however, are that the Fed still won't be able to prevent another crisis, and that it will be an even clearer target for blame if that occurs. "The bill has good intentions, but I'm worried about its implementation. If I were the Fed, I'd be seriously worried about being left holding the bag," said Anil Kashyap, a professor at the University of Chicago's Booth School of Business.
The Fed, of course, still shares responsibility for overseeing the financial system with the Federal Deposit Insurance Corp., the Securities and Exchange Commission and other agencies with which it sits on the new Financial Stability Council. And in a change, the new law requires the Fed to get the Treasury's go-ahead before using its extraordinary authority to lend to almost anyone, and limits loans to sectors of the economy rather than individual firms, such as Bear Stearns or AIG.
But the Fed's role is in most respects expanded by the legislation. The central bank will decide whether the council should vote on breaking up big companies if they threaten the stability of the entire financial system. It also will be able to force big financial companies—not just firms legally organized as banks—to boost their capital and liquidity. It will have the power to scrutinize the largest hedge funds.
All this could suck the Fed into political controversies. A decision to break up a big bank because of its size likely would subject the Fed to conflicting pressures from lobbyists and politicians. "It could give a lot of people reason to interfere," says Thomas Cooley, professor at the New York University Stern School of Business.
The Fed's role in the rescue of AIG and Bear Stearns, and its acquiescence in letting Lehman Brothers fail, led the public to question the Fed's powers and prompted Congress to consider curtailing its powers. One threat came from legislation sponsored by long-time Fed critic Ron Paul (R., Texas), author of the best-selling book "End the Fed," who sought to expand the authority of the congressional Government Accountability Office to audit the Fed. The new law expands the GAO's auditing authority but avoids nearly all provisions that alarmed the Fed.
In the end, the Fed's emergency lending during the 2008 crisis will face a one-time audit to be published by Dec. 2010 and it will be required—with a two-year lag—to reveal which banks borrow from its discount window. With lobbying from several presidents of the 12 regional Federal Reserve Banks, the Fed also fought off proposals to remove it from supervision of the large number of smaller banks.
"Basically, they ended up winning almost on everything that counts," says Laurence Meyer, a former Fed board governor now with economic consulting firm Macroeconomic Advisers LLC.
The Fed will surrender its responsibilities for consumer-finance regulation —never central to its mission or to its chairmen—which will be shifted to a new independent agency. It will be housed and financed by the Fed, but the central bank won't have any authority over it.
In a sign of the greater importance assigned to financial stability, the Federal Reserve Board will get a second vice chair position, this one responsible for supervision, to be chosen by the White House. One likely contender is Daniel K. Tarullo, a Georgetown University law professor who was President Barack Obama's first appointee to the Fed board and is the point person on bank regulation. He already has been pulling control of bank supervision to Washington from the New York and other regional Fed banks, which oversees the big Wall Street firms.
Congress also gave the Fed responsibility for setting the fees merchants must pay banks when customers use their debit cards, another political hot potato. The Fed will have nine months to collect data and decide on a ceiling for such fees that must be "reasonable and proportional to the cost of processing those transactions." During this time, there's certain to be a lobbying war pitting retailers and banks. The Fed faces criticism from consumer groups if it sets the fee threshold too high or anger from banks if the level is set too.
Once again – we hear lots of rhetoric that the Federal Reserve’s power will be reduced (talk).
Once again, the Federal Reserve gains more power over us (actions).
We need leaders that are concerned about the future of the United States of America – not how good they look on camera.
jg – July 15, 2010
_________________________
JULY 15, 2010
Fed Gets More Power, Responsibility
By LUCA DI LEO
After fending off most challenges to its independence and winning new powers to oversee big financial firms, the Federal Reserve has emerged from a bruising debate on the overhaul of U.S. financial rules as perhaps the pre-eminent regulator in the sector. But that could only bring it added blame if things go wrong again.
Just a few months ago, amid populist anger at the Fed for failing to prevent the financial crisis of 2008 and bailing out Wall Street, Congress was talking of stripping the central bank of its supervisory oversight of banks or forcing it to submit to congressional audit of its interest-rate decisions.
Instead, the new law gives the Fed more power and a better tool box to help prevent financial crises. It will become the primary regulator for large, complex financial firms of all kinds, such as American International Group, the insurer which built a massive derivatives portfolio that regulators didn't see until it was too late.
Congress approved a sweeping rewrite of rules that touch every corner of finance in the biggest expansion of government power over banking and markets since the Great Depression. David Wessel, David Reilly and Al Lewis discuss the likely impact of Dodd-Frank.
This isn't the first time Congress has expanded the Fed's role. After the Great Depression, it passed the Employment Act in 1946, charging the Fed with averting the huge unemployment seen in the 1930s. After the double-digit inflation of the 1970s, the Fed was formally given a dual mandate of promoting both price stability and maximum sustainable employment. In the wake of the latest financial crisis, the Fed is effectively being told to add the maintenance of financial stability to its responsibilities.
The risks, however, are that the Fed still won't be able to prevent another crisis, and that it will be an even clearer target for blame if that occurs. "The bill has good intentions, but I'm worried about its implementation. If I were the Fed, I'd be seriously worried about being left holding the bag," said Anil Kashyap, a professor at the University of Chicago's Booth School of Business.
The Fed, of course, still shares responsibility for overseeing the financial system with the Federal Deposit Insurance Corp., the Securities and Exchange Commission and other agencies with which it sits on the new Financial Stability Council. And in a change, the new law requires the Fed to get the Treasury's go-ahead before using its extraordinary authority to lend to almost anyone, and limits loans to sectors of the economy rather than individual firms, such as Bear Stearns or AIG.
But the Fed's role is in most respects expanded by the legislation. The central bank will decide whether the council should vote on breaking up big companies if they threaten the stability of the entire financial system. It also will be able to force big financial companies—not just firms legally organized as banks—to boost their capital and liquidity. It will have the power to scrutinize the largest hedge funds.
All this could suck the Fed into political controversies. A decision to break up a big bank because of its size likely would subject the Fed to conflicting pressures from lobbyists and politicians. "It could give a lot of people reason to interfere," says Thomas Cooley, professor at the New York University Stern School of Business.
The Fed's role in the rescue of AIG and Bear Stearns, and its acquiescence in letting Lehman Brothers fail, led the public to question the Fed's powers and prompted Congress to consider curtailing its powers. One threat came from legislation sponsored by long-time Fed critic Ron Paul (R., Texas), author of the best-selling book "End the Fed," who sought to expand the authority of the congressional Government Accountability Office to audit the Fed. The new law expands the GAO's auditing authority but avoids nearly all provisions that alarmed the Fed.
In the end, the Fed's emergency lending during the 2008 crisis will face a one-time audit to be published by Dec. 2010 and it will be required—with a two-year lag—to reveal which banks borrow from its discount window. With lobbying from several presidents of the 12 regional Federal Reserve Banks, the Fed also fought off proposals to remove it from supervision of the large number of smaller banks.
"Basically, they ended up winning almost on everything that counts," says Laurence Meyer, a former Fed board governor now with economic consulting firm Macroeconomic Advisers LLC.
The Fed will surrender its responsibilities for consumer-finance regulation —never central to its mission or to its chairmen—which will be shifted to a new independent agency. It will be housed and financed by the Fed, but the central bank won't have any authority over it.
In a sign of the greater importance assigned to financial stability, the Federal Reserve Board will get a second vice chair position, this one responsible for supervision, to be chosen by the White House. One likely contender is Daniel K. Tarullo, a Georgetown University law professor who was President Barack Obama's first appointee to the Fed board and is the point person on bank regulation. He already has been pulling control of bank supervision to Washington from the New York and other regional Fed banks, which oversees the big Wall Street firms.
Congress also gave the Fed responsibility for setting the fees merchants must pay banks when customers use their debit cards, another political hot potato. The Fed will have nine months to collect data and decide on a ceiling for such fees that must be "reasonable and proportional to the cost of processing those transactions." During this time, there's certain to be a lobbying war pitting retailers and banks. The Fed faces criticism from consumer groups if it sets the fee threshold too high or anger from banks if the level is set too.
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