Bernanke's Second Term: What Does the Fed Have to Give Up to Get It?
Federal Reserve Chairman Ben S. Bernanke left a Senate confirmation hearing with support for a second term heading a central bank that may be shorn of its powers to supervise financial firms.
Banking Committee Chairman Christopher Dodd of Connecticut backed Bernanke yesterday and said he’s likely to be confirmed by the full Senate. Dodd credited Bernanke with preventing a financial meltdown, even though the Fed’s oversight of banks leading up to the crisis was an “abysmal failure.”
Bernanke told the committee that the Fed’s ability to maintain a stable financial system and conduct monetary policy is “critically dependent” on its supervision powers. He got no assurances that the Fed’s authority would remain intact as Congress considers an overhaul of financial regulations in a bid to prevent a repeat of the worst crisis since the 1930s.
“The Fed chairman will have won the battle but lost the war if Congress strips the Fed of its authority to regulate banks,” said Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Dodd’s bill would consolidate oversight of banks, now shared between the Fed and three other regulators, into a single new agency. He would also deprive the Fed of consumer-protection powers and curtail its ability to make emergency loans to troubled firms.
“We shouldn’t have had to go through what we did for the last two years, had there been cops on the street doing their job, telling us what was going on, and allowing us to avoid the problem in the first place,” said Dodd, a Connecticut Democrat.
Dodd’s proposal differs from plans offered by the Obama administration and House Financial Services Committee, which would maintain the Fed’s supervisory powers.
So wait a minute, is Bernanke going to have to give up his Fed's big badassery to get his confirmation to go through?
Good. Make him also give up a pony and a bazillion dollars. And have that bastard hand over the printing press before we give him a second term, he's dangerous with that thing.