June 9 (Bloomberg) — The Federal Reserve has backed off from seeking a new tool to forestall inflation, refraining from asking Congress for the power to issue its own debt, according to a person familiar with the matter. Putting off the issue may avoid a political clash over whether the Fed should begin winding down its emergency lending programs while unemployment remains elevated. The central... [more]
June 9 (Bloomberg) — The Federal Reserve has backed off from seeking a new tool to forestall inflation, refraining from asking Congress for the power to issue its own debt, according to a person familiar with the matter.
Putting off the issue may avoid a political clash over whether the Fed should begin winding down its emergency lending programs while unemployment remains elevated. The central bank intends to rely instead on paying interest on banks’ reserve deposits to prevent a flood of cash into the economy.
After central bankers repeatedly said Fed bills would be a useful additional tool to mop up liquidity, Chairman Ben S. Bernanke omitted mention of the idea in congressional testimony last week. The person, who spoke on condition of anonymity, said the Fed hasn’t made a formal request to lawmakers.
“It’s important that we have all the tools in place” for the Fed to drain liquidity when it’s ready, House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, said in an interview. Still, “it would be a mistake to start dealing with that before you know when, how, how much, et cetera.” . . .
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Response by Riversider
about 17 years ago
Posts: 13573
Member since: Apr 2009
WASHINGTON – The Federal Reserve could become the supercop for "too big to fail" companies capable of causing another financial meltdown under a proposal being seriously considered by the White House.
The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.
Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring systemwide risk.
"Committees don't make decisions," said Geithner, according to one participant.
Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.
The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the Independence Day recess.
The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.
A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner's position that he wants a "single independent regulator with responsibility for systemically important firms and critical payment and settlement systems."
A spokesman said Geithner also is open to creating a council to "coordinate among the various regulators, including the systemic risk regulator."
The Fed itself hasn't taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.
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Response by Riversider
about 17 years ago
Posts: 13573
Member since: Apr 2009
Fed members largely get appointed by..LARGE BANKING INSTITUTIONS.
The federal reserve reminds me a lot of Robert Moses. Not elected, never has to answer to the public. We know how that one ended...
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Response by aboutready
about 17 years ago
Posts: 16354
Member since: Oct 2007
riversider, just finished reading Bailout Nation by Barry Ritholtz. you should pick it up. has some great historical commentary, as well as an extremely insightful analysis of where we are and how we got there. and yes, the Fed has expanded it's powers in a manner that is quite astonishing.
WASHINGTON – The Federal Reserve could become the supercop for "too big to fail" companies capable of causing another financial meltdown under a proposal being seriously considered by the White House.
The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.
Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring systemwide risk.
"Committees don't make decisions," said Geithner, according to one participant.
Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.
The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the Independence Day recess.
The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.
A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner's position that he wants a "single independent regulator with responsibility for systemically important firms and critical payment and settlement systems."
A spokesman said Geithner also is open to creating a council to "coordinate among the various regulators, including the systemic risk regulator."
The Fed itself hasn't taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.
Fed members largely get appointed by..LARGE BANKING INSTITUTIONS.
http://www.cbsnews.com/stories/2009/04/03/politics/washingtonpost/main4916206.shtml
The federal reserve reminds me a lot of Robert Moses. Not elected, never has to answer to the public. We know how that one ended...
riversider, just finished reading Bailout Nation by Barry Ritholtz. you should pick it up. has some great historical commentary, as well as an extremely insightful analysis of where we are and how we got there. and yes, the Fed has expanded it's powers in a manner that is quite astonishing.