Posts Tagged ‘regulation’

How Much Power Should We Give The Fed?

Tuesday, August 18th, 2009

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