bobbyw24
05-13-2010, 04:11 AM
By Silla Brush - 05/13/10 06:00 AM ET
Populist lawmakers are failing to convert public outrage at Wall Street into tighter controls on the Federal Reserve.
Despite attracting blame for the financial meltdown and great recession, the central bank is emerging with its powers mostly intact and free of political interference.
Instead of submitting to a chokehold by Congress, the Fed is walking away largely unscathed from fights with lawmakers from the left and right.
As Congress revamps Wall Street regulations, Democrats and Republicans have sharply criticized the Fed and its chairman, Ben Bernanke, for lapses in the run-up to the crisis. They have lashed out at the bank for committing trillions in taxpayer dollars to bail out Wall Street.
In January, Bernanke received the fewest votes in support of his confirmation of any Fed chairman.
But a bipartisan consensus is emerging to protect the Fed’s independence and shore up the private market’s confidence in the central bank.
The Senate approved two amendments this week that are victories for the Fed, and lawmakers are on the way to passing legislation that houses a new consumer protection regulator at the central bank.
“I think there is a broad recognition of the benefits of having an independent central bank,” said Lou Crandall, chief economist at Wrightson ICAP.
Sen. Bernie Sanders (I-Vt.) last week scaled back a popular amendment requiring new audits of the bank, amid warnings from the White House and Fed that it would compromise the independence of the bank and threaten monetary policy.
On Tuesday, the Senate approved, 96-4, the modified amendment, which would require a one-time audit of the central bank’s emergency lending during the crisis but not provide broader audit power of monetary policy. Shortly afterward, senators voted down, 37-62, a much tougher amendment from Sen. David Vitter (R-La.) that mirrored legislation the House passed in December.
The Fed audit issue was a rallying cry for liberal Democrats and conservative Republicans. Rep. Ron Paul (R-Texas), a longtime critic of the bank and author of the recent book End the Fed, is the main supporter of heightened audits. Paul criticized Sanders for modifying the amendment.
Rep. Alan Grayson (D-Fla.), the other main supporter of the House legislation, applauded the Senate for passing the modified amendment.
Continue
http://thehill.com/homenews/administration/97659-the-fed-keeps-its-power
Populist lawmakers are failing to convert public outrage at Wall Street into tighter controls on the Federal Reserve.
Despite attracting blame for the financial meltdown and great recession, the central bank is emerging with its powers mostly intact and free of political interference.
Instead of submitting to a chokehold by Congress, the Fed is walking away largely unscathed from fights with lawmakers from the left and right.
As Congress revamps Wall Street regulations, Democrats and Republicans have sharply criticized the Fed and its chairman, Ben Bernanke, for lapses in the run-up to the crisis. They have lashed out at the bank for committing trillions in taxpayer dollars to bail out Wall Street.
In January, Bernanke received the fewest votes in support of his confirmation of any Fed chairman.
But a bipartisan consensus is emerging to protect the Fed’s independence and shore up the private market’s confidence in the central bank.
The Senate approved two amendments this week that are victories for the Fed, and lawmakers are on the way to passing legislation that houses a new consumer protection regulator at the central bank.
“I think there is a broad recognition of the benefits of having an independent central bank,” said Lou Crandall, chief economist at Wrightson ICAP.
Sen. Bernie Sanders (I-Vt.) last week scaled back a popular amendment requiring new audits of the bank, amid warnings from the White House and Fed that it would compromise the independence of the bank and threaten monetary policy.
On Tuesday, the Senate approved, 96-4, the modified amendment, which would require a one-time audit of the central bank’s emergency lending during the crisis but not provide broader audit power of monetary policy. Shortly afterward, senators voted down, 37-62, a much tougher amendment from Sen. David Vitter (R-La.) that mirrored legislation the House passed in December.
The Fed audit issue was a rallying cry for liberal Democrats and conservative Republicans. Rep. Ron Paul (R-Texas), a longtime critic of the bank and author of the recent book End the Fed, is the main supporter of heightened audits. Paul criticized Sanders for modifying the amendment.
Rep. Alan Grayson (D-Fla.), the other main supporter of the House legislation, applauded the Senate for passing the modified amendment.
Continue
http://thehill.com/homenews/administration/97659-the-fed-keeps-its-power