I enjoy reading news of the United States in foreign papers because I often see what I consider a more honest view point. This article is about the Federal Reserve and President Obama’s plans to give the Federal Reserve more power over the financial institutions in the US.
But in the days since Obama’s speech criticisms of his accompanying 88-page white paper have come from almost every interested party; from regulators and politicians, to major companies and lobby groups. Rather than a wasted opportunity, the Obama administration’s proposed reforms have triggered a major debate as to the future of financial regulation in the US – one which looks unlikely to be settled by the current proposals alone.
At the centre of that debate is the role of the Federal Reserve, since 1913 America’s independent central bank. That independence has been threatened, opponents allege, by proposals to place it at the heart of US financial regulation, giving it increased powers as a systemic risk regulator while at the same time increasing its oversight of major banks
Now I hope you will remember that the Federal Reserve regardless of the name is NOT a federal agency. The Federal Research is a private company to which the federal government relinquished much of its power first in 1913 when it was begun and again in 1935 when Congress gave the Federal Reserve the power to print money which is a power our Constitution gives only to congress. Recently Congress took a step back from it’s tradition hands off the Fed stand in requiring a yearly audit of Federal Reserve funds.
It should be noted that some 232 members of the House of Representatives recently sponsored a little talked-about bill to force annual audits of the Fed for the first time, questioning its power and its increasing role. At its launch, House Speaker Nancy Pelosi said: “A balance has to be struck as to what is required to run the Fed in a responsible way, about what transparency there should be.”
To place the currency management under a private agency in the first place was an attempt to take politics out of the system. Now with an over abundance of agencies that have been created to oversee one thing and another the fear is that over-regulation will hamper the economy rather than help it.
I see a far more possible reason for President Obama wanting to put so much power in the hands of the Federal Reserve: it will be much easier to then place the Federal Reserve under the Global Financial Regulatory Agency to which he sign on at the G20 Conference. So the more control the Fed has the more power over our currency can be easily turned over when the time comes. BB