Arguing both sides

30 November 2009 By Richard Beales Follow @richardbeales1

The US central bank wants to retain its distance from Congress, particularly on monetary policy while keeping or even expanding its already beefed up responsibilities for bank regulation. It s a tricky balance. There are arguments for both, but reconciling them is a challenge.

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Ben Bernanke, the chairman of the U.S. Federal Reserve, is set to testify December 3 before the Senate Banking Committee, which is considering his nomination to a second fouryear term in office.

In a November 29 oped in the Washington Post, Bernanke said he was concerned that "a number of the legislative proposals being circulated would significantly reduce the capacity of the Federal Reserve to perform its core functions". He cited proposed measures in the Senate that would strip the Fed of bank regulatory powers and a House committee vote "to repeal a 1978 provision that was intended to protect monetary policy from shortterm political influence".

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Arguing both sides

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