How big should government be? Below, the Fed chairman’s arguments for why, when it comes to consumer protection, bigger is better.

• Federal Reserve chairman Ben S. Bernanke has been spurring debate about the Fed’s proper role, arguing that it is necessary to give the government more authority.
• Bernanke wants the Fed to maintain control over consumer lending, an opinion which differs from the policies of the Obama administration.
• Many officials are skeptical of this plan, arguing that the government is already spread too thin, and that it cannot possibly become a successful systemic risk regulator.

Facts & Figures

• Bernanke’s plan requires the government to examine the possible dangers posed not just by companies themselves, but by their connections to other corporations.
• The Fed would also require big corporations to keep debt low or capital high, restricting them to a manageable size and increasing competition.
• The government would be granted the authority to seize any institution it deemed too great a danger to the financial system.

Best Quote

“…[T]here’s got to be somebody who is responsible not just for monitoring the health of individual institutions, but somebody who’s monitoring the systemic risks of the system as a whole. And we believe the Fed has the most technical expertise and the best track record in terms of doing that.” – Barack Obama

Tags: Federal Reserve, government, regulation, the fed