Thursday, June 18, 2009
June 18 (Bloomberg) — Treasury Secretary Timothy Geithner defended the administration’s proposal to give the Federal Reserve increased powers in his first public tussle with lawmakers skeptical whether the central bank is up to the job.
Advocating for President Barack Obama’s regulatory overhaul on Capitol Hill, the Treasury chief faced repeated questions from senators who cited previous regulatory failures at the Fed and potential conflicts with its monetary-policy duties.
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“The Federal Reserve is best positioned” to oversee the biggest financial companies, Geithner told the Senate Banking Committee in Washington, adding that the Obama plan gives the Fed only “modest additional authority.” Most central banks around the world have some responsibility for monitoring systemic risks, he said.
Obama’s plan calls for the Fed to monitor the biggest, most interconnected banks, sets up a new agency to oversee consumer financial products and brings hedge funds and private equity firms under federal supervision for the first time. The central bank, which supervised Citigroup Inc. and Bank of America Corp., has come under fire from some members of Congress for its secretiveness and lack of public accountability.
This article was posted: Thursday, June 18, 2009 at 9:06 am