US Moots Reforms in Federal Reserve
The US president has plans to invest the Federal Reserve with greater powers but is aware that the reforms will have to be balanced out with a new regulatory body.
The US administration has released a report titled “Financial Regulatory Reform: A New Foundation” which calls for broad changes in the structure of the central bank and suggests ways to bolster it powers. Among the ways in which it could do the latter is to act as the supreme regulator of major, interconnected corporate entities whose difficulties could throw the entire financial system into turmoil. According to other proposals in the report, the Federal Reserve would also being given the power make emergency payments and settlements so that the financial system can continue to run smoothly in even of a crisis.
However the administration’s report is likely is to be criticized in the Congress for investing too much power with the central bank. Already several critics have argued that the Federal Reserve should focus more on monetary policy rather than regulation corporate entities.
However suggestions for reforms in the structure and power of the central bank come with another proposal of setting up a new interagency council which will monitor the workings of the bank as well as threats to the entire financial system.
