Lawmakers fear turning Fed into regulatory monster Obama

Site Notices

2024's Favorite CCW? | PSA Micro Dagger

[ARCHIVED THREAD] - Lawmakers fear turning Fed into regulatory monster Obama

Posted: 6/16/2009 11:10:42 AM EDT

WTF? The cart is in front of the horse. There is so much BS that............

http://finance.yahoo.com/news/Lawmakers-fear-turning-Fed-apf-15540021.html?sec=topStories&pos=main&asset=&ccode=

WASHINGTON (AP) –– Many lawmakers fear President Barack Obama's
plan to prevent another financial meltdown might end up turning the
Federal Reserve into an all-powerful monster –– a friction that could
slow down a major overhaul of banking and market regulations.

In a speech on Wednesday, Obama is expected to propose that the Fed
take on a role as America's financial supercop. Already the nation's
central bank, the Federal Reserve would supervise large financial
institutions that are considered so big that their failure could
undermine the economy.

A council of regulators, which would include the Fed, would be established to monitor risk throughout the broader system.

The goal would be to prevent any more crashes like those that felled AIG and Lehman Brothers.

Obama
said Tuesday the new rules will try to eliminate the kind of excessive
risk-taking by financial institutions that proved "very dangerous to
the American people."

"It's going to be, as usual, a heavy lift
because there are going to be people who want to keep on taking these
risks, counting on U.S. taxpayers to bail them out if their bets go
bad," he said.

While Democrats generally agree, many oppose relying too heavily on the Fed.

They
say its status as a politically independent organization would make it
difficult to keep the newly empowered organization in check.

"What
happens if the representatives of the people and the president want a
certain action and it's not taken?" asked Rep. Paul Kanjorski of
Pennsylvania, a senior Democrat on the House Financial Services
Committee.

"You can't fire the chairman of the Federal Reserve," Kanjorski said.

Sen. Christopher Dodd, chairman of the Banking Committee, is likely to become Obama's toughest opponent.

In
private deliberations with the administration, Dodd has advocated an
alternative plan to strip the Fed of its regulatory role entirely.
Dodd's plan would create a new consolidated bank regulator that would
assume the roles that the Fed and Federal Deposit Insurance Corp. now
play in helping regulate state-chartered banks.

Under this
scenario, the Fed would focus on its existing mission as the nation's
central bank –– setting monetary policy and acting as a "lender of last
resort."

According to aides, key lawmakers including Dodd and the
administration have agreed that the Fed should give up its oversight of
consumer protection regulations. The administration will propose a new
Consumer Financial Protection Agency, an independent office that would
monitor financial products like credit cards, an Obama official said
Tuesday.

Obama's decision to create the agency is in response to
criticism that lenders and credit card companies have taken advantage
of unwitting consumers and saddled them with debt.

Lawmakers,
including Dodd, also say they are open to the administration's proposal
that the FDIC be put in charge of dismantling financial institutions
that the Fed and Treasury Department decide pose a threat to the
economy.

Rep. Barney Frank, a Massachusetts Democrat and chairman
of the House Financial Services Committee, has not taken a position on
the administration's plan to bolster the powers of the Fed.

But other House members, including Republicans, say it's a terrible idea.

In
a staff document circulated last week, House Republicans on the
committee argued that expanding the Fed's responsibilities and
increasing government spending pose "a far more significant source of
'systemic risk' to our nation's economy than the failure of any
specific financial institution."

Obama said those calling to get government "off our backs" have a short memory.

"I
think that's what some of the special interests and lobbyists are going
to be counting on –– that somehow we've forgotten the disaster that
arose out of their reckless behavior," he said.

Several lawmakers
say they also want Obama's plan to go further in restricting
compensation paid to financial executives at banks that accept
government aid.

The brewing debate and industry opposition could threaten to derail plans to pass a major regulation package quickly.

Aides said this week that Dodd and Frank are still committed to sending Obama a bill to sign by the end of the year.

Rep.
Brad Miller, a member of the House Financial Services Committee, said
enacting meaningful change is likely to become a painful fight for
everyone. But preventing another economic collapse in a way that
doesn't rely on bank bailouts is a voter mandate, he said.

"The
American people are fit to be tied about what has happened to keep the
financial system afloat," said Miller, a Democrat from North Carolina.

Associated Press Writer Jim Kuhnhenn contributed to this report.

Posted: 6/16/2009 11:23:58 AM EDT

[#1]

Will this be reported on ABC?

Posted: 6/16/2009 11:26:11 AM EDT

[#2]

Great.

Put the people partially responsible for the problem in charge.

Posted: 6/16/2009 11:49:14 AM EDT

[#3]

just what we need, more .gov dumbasses calling the shots....

Posted: 6/16/2009 11:54:48 AM EDT

[#4]

Posted: 6/16/2009 12:00:01 PM EDT

[#5]

Quoted:

http://img301.imageshack.us/img301/8430/facepalmimplied.jpg

[ARCHIVED THREAD] - Lawmakers fear turning Fed into regulatory monster Obama

General » General Discussion

Win a FREE Membership!

Sign up for the ARFCOM weekly newsletter and be entered to win a free ARFCOM membership. One new winner* is announced every week!

You will receive an email every Friday morning featuring the latest chatter from the hottest topics, breaking news surrounding legislation, as well as exclusive deals only available to ARFCOM email subscribers.

Warning

Confirm Action

About AR15.COM

Stay Connected

Newsletter

Contact Us