Bernanke worries Fed will lose authority and independence

By Incorrect Author 30 November 2009

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

Gallery

While we have your attention...

An increasingly rare commodity, quality independent journalism costs money - though not nearly as much as its absence.

Every article, every day, is our contribution to Defending Truth in South Africa. If you would like to join us on this mission, you could do much worse than support Daily Maverick's quest by becoming a Maverick Insider.

Click here to become a Maverick Insider and get a closer look at the Truth.


Foreign Relations

Ramaphosa leads high-powered delegation to the UN – to sell SA

By Peter Fabricius

Adolf Hitler was the first European leader to ban human zoos.