Brace Yourselves: Expanded Federal Reserve Powers

C-101

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http://news.yahoo.com/s/ap/20100315/ap_on_bi_ge/us_financial_overhaul

WASHINGTON – A new Democratic Senate bill to tame the financial markets would give the government new powers to break up firms that threaten the economy and would force the industry to pay for its failures.

Legislation unveiled Monday by Senate Banking Committee Chairman Christopher Dodd falls shy of the ambitious restructuring of federal financial regulations envisioned by President Barack Obama or contained in legislation already passed in the House.

But the bill would still be the biggest overhaul of regulations since the New Deal. It comes 18 months after Wall Street's failures helped plunge the nation into a deep recession.

A leaner Federal Reserve would gain new powers to regulate the size and the activities of the nation's largest financial firms. The bill would create a consumer protection bureau within the Federal Reserve to write regulations governing all lending transactions. Bank regulators, however, could appeal those regulations if they believe they would affect the health of the banking system.

In announcing his bill at a news conference, Dodd stood alone, a sign of the difficult task ahead of him in forging a bill that can pass the Senate.

The breadth of the bill would touch all corners of the financial sector, from storefront payday lenders to the highest penthouse office suites on Wall Street.

The bill creates a powerful nine-member Financial Stability Oversight Council that could:

_Place large, interconnected financial institutions such as insurance conglomerate American International Group under the supervision of the Federal Reserve.

_Approve the break up of large complex companies if they pose a "grave threat" to the to the nation's financial system.

Such actions would require a two-thirds vote of the council.

Oh boy, an unelected council of government types deciding the fate of our private sector financial institutions. If you control finance, you indirectly control everything.
 

Claudette

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Wonder if Cox, Dodd and Franks get to go to jail for their lack of oversite during this whole mess?? Kinda don't think so.

They sure didn't enforce any of the regs that were in place and look at Dodd now trying to pretend he give a shit. The big bad banks?? Dodd and the rest of the Clowns were asleep at the switch. What a loser this guy is.
 

RodISHI

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Giving more power to a few bankers at the federal reserve instead of killing the fed like they should?
 

uscitizen

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Finiancial institutions need more regulations and oversight.
That much is clear.

We do not need to live in a Corporate Republic.
 

Avatar4321

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Can we have a solution to this country's problems that involves limiting the power of politicians instead of expanding it?
 

Kevin_Kennedy

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Giving the institution responsible for the mess more power makes no sense.
 

AmericanFirst

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Can we have a solution to this country's problems that involves limiting the power of politicians instead of expanding it?

Same question for corporations instead of politicians.
Problem is what the Dimwits are doing is exactly opposite what the founding fathers set up. They are violating the constitution and are socialists. This country was made great by capitalism not by the gov't.
 
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boedicca

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There's another nasty aspect to the Dodd bill: turning the president of the NY Federal Reserve into a presidential appointee. Why only this one? It's clearly a first step to a complete politicization of the Fed, making the manipulation of interest rates and money supply even more open to political abuse in favor of cronies and patronage pay-offs.


The New York Federal Reserve Bank's president would become a political appointee and bank chiefs like JPMorgan Chase's Jamie Dimon could no longer sit on the board of their regulator under a proposal unveiled by the head of the Senate Banking Committee on Monday.

As part of a new bill aimed at revamping financial regulation after the worst banking crisis since the 1930s, Senator Christopher Dodd's plan gives the president the power to name the head of the most important regional Fed bank.

"The bill clamps down on conflicts of interest at the Federal Reserve, making the head of the New York Fed, for example, a position appointed by the president of the United States and not hand-picked by the very bankers the New York Fed is responsible for regulating," the Connecticut Democrat told reporters as he unveiled his bill.

Critics said the proposed governance change could weaken the central bank's independence.

"The New York Fed president is currently removed from the political process, which is helpful. But there are people around who would clearly use any Trojan Horse as a way to bring the Fed under more political control," said Charles Lieberman, chief investment officer at Advisors Capital Management and a former New York Fed staffer....


http://news.yahoo.com/s/nm/20100315/bs_nm/us_financial_regulation_governance_1
 

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