Bernanke was sworn in for another 4 year-term. In contrast to his swearing-in ceremony 4 years ago, this one was quiet and more “humble”.
This video commemorates Bernanke’s swearing-in under Bush. Obama’s Bernanke is the same Bush Bernanke; same game plan, same priorities, same feeding trough. This is a well-done and surprisingly fact-based video.
NYTimes has a great piece on the real issue with regulation and the Federal Reserve. It’s not really about who is the regulator. It’s about what a harmonized oversight architecture looks like that is actually set up to maximize the safety and soundness for the whole economy, which includes the general public. We haven’t seen a really serious regulatory reform plan yet. A smart economist and Fed governor is featured in the article saying,
“Policy makers, in my view, should be more focused on what constitutes effective prudential supervision, rather than be diverted to the less consequential discussion as to who should perform it,” Mr. Warsh told the New York Association for Business Economics.
Mr. Warsh said the idea of “resolution authority” — which would empower a regulator to step in and dismantle a failing financial institution before it jeopardized the economy — “is unlikely, in the near term, to drive the market discipline required to avoid the recurrence of financial crises.”
Mr. Warsh called for more accurate and timely information to be provided to shareholders, creditors and regulators; more robust competition in the financial services industry, which he described as “ripe for a healthy dose of creative destruction”; and stronger capital and liquidity requirements, along with better corporate governance and risk management.
“We need a new financial architecture, one in which improved regulation and supervision play an important but co-extensive role with greater market discipline,” he said.
What’s odd to me about the article is Bernanke’s admission that the Federal Reserve need be more democratic (my words), or rather more transparent and accountable, yet pushback on an audit of their goings-ons.
“At the Federal Reserve and other agencies, the crisis revealed weaknesses and gaps in the regulation and supervision of financial institutions and financial markets,” Mr. Bernanke said. The Fed, he said, was revamping how it conducts oversight and collaborating with Congress and financial authorities in other countries to reform banking regulations.
However, Mr. Bernanke also defended the Fed’s autonomy, at a time when some critics in Congress have called for auditing its monetary policy.
“Institutional independence brings with it fundamental obligations of transparency, responsiveness and accountability,” Mr. Bernanke said, adding: “It is essential that the public have the information it needs to understand and be assured of the integrity of all our operations, including all aspects of our balance sheet and our financial controls.”
Earlier on Wednesday, Kevin M. Warsh, another Fed governor, suggested in a speech in Manhattan that the regulatory debate in Congress was not addressing the right questions.
“Policy makers, in my view, should be more focused on what constitutes effective prudential supervision, rather than be diverted to the less consequential discussion as to who should perform it,” Mr. Warsh told the New York Association for Business Economics.
Archein