Bernanke worries Fed will lose authority and independence
US Fed chairman Ben Bernanke is worried that congressional efforts at financial reform could weaken the central bank's ability to handle future crises. Worse, he thinks these efforts may politicise monetary policy more than it already is. Considering that many in the free-wheeling US markets already think government bailouts are the road to socialism, Bernanke’s worries are likely to become very partisan concerns. He doesn’t like a bill that would strip the Fed of its bank regulatory authority, and give the Senate a role in selecting the 12 regional Federal Reserve bank presidents. This item is supposed to return the Fed to its core mission of setting monetary policy, citing its total failure to have cracked down on risky lending practices that led to the financial meltdown. Bernanke, of course, reckons the Fed played a big part in arresting the crisis. Another piece of proposed legislation that bothers him is a House financial regulatory bill that would repeal a 1978 ban on congressional audits of Fed interest-rate decisions. The proponents of the bill think it will bring more transparency and accountability to the Fed, adding that it should not be construed as interference in monetary policy by Congress. These guys sound like Cosatu. Read more: BusinessWeek
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