Bernanke: Dodd, Paul Bills Would Hurt Economy
By JON HILSENRATH
Federal Reserve Chairman Ben Bernanke counterpunched against congressional critics, warning in a Washington Post opinion column that Capitol Hill efforts to audit the central bank and curtail its regulatory powers could be dangerous for the economy and fragile financial system.
Ben Bernanke
The House Financial Services committee earlier this month passed a controversial provision sponsored by Rep. Ron Paul (R., Tex.) that would subject the Fed to tougher scrutiny by the Government Accountability Office, an arm of Congress. Meanwhile, Senate Banking Committee Chairman Christopher Dodd (D., Conn.) has proposed a financial services reform package that would strip the Fed of most of its power to supervise banks.
Mr. Bernanke said the measures were "very much out of step with the global consensus on the appropriate role of central banks," and added that they "would seriously impair the prospects for economic and financial stability in the United States."
In order to push interest rates to near zero without igniting inflation fears in markets, Mr. Bernanke argued, investors had to believe the Fed was immune from political pressure. The House GAO audit proposal would "serve only to increase the perceived influence of Congress on monetary policy decisions, which would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation."
He admitted that the Fed had not done "all that it could have to constrain excessive risk-taking in the financial sector in the period leading up to the crisis." But he argued it has moved aggressively to improve its bank oversight and needed that power to help keep markets and the economy stable.
The column by the Fed chairman was part of a broader effort by the Mr. Bernanke to speak out more publicly about the central bank's actions. In the past two years, he has helped engineer controversial financial rescues of firms like American International Group Inc. and Bear Stearns and pumped $1 trillion into the financial system.
He has tried to explain these actions and appeal directly to the public by appearing on the '60 Minutes' news program and PBS, taking more questions after speeches and writing columns for The Wall Street Journal and now The Washington Post.
His latest column will appear in Sunday's editions but was posted online by the Post late Friday.
This step by Mr. Bernanke was unusual because it happened just a few days before Mr. Bernanke's Dec. 3 hearing before Mr. Dodd's committee, which is considering whether to confirm him for a second term. Officials usually maintain a low profile before confirmation hearings, in part as a courtesy to committee members.
The chairman is sure to be grilled at the hearing, not only about his own decisions during the crisis, but about the future of the central bank itself. With so much at stake in that coming session, he decided to lay aside the convention of remaining behind the scenes.
Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved
0 comments:
Publicar un comentario