US to propose sweeping new powers for Fed: report

Dandelion Salad

29/03/2008 11h45

WASHINGTON (AFP) – President George W. Bush’s administration will propose sweeping new oversight powers for the Federal Reserve in a bid to avoid calamities like the current subprime crisis, The New York Times reported Saturday.

Citing a summary of the plan provided by the administration, the newspaper said the Fed will gain the power to investigate any activities of financial institutions that threaten US economic stability, gather information and combat risks to the financial system as a whole.

The plan will be proposed on Monday, the paper said.

The Securities and Exchange Commission would lose some of its authority and is likely to be combined with the Commodity Futures Trading Commission that regulates trade in gas, oil and other goods, the report said.

The report came as new statistics showed US consumer spending stalled in February despite rising incomes as Americans boosted savings amid recession fears.

A Commerce Department report showed a meager 0.1 rise in spending, the driver of growth in the world’s biggest economy. The figure was the weakest since September 2006 and matched analysts’ consensus forecast.

The proposal is due to be unveiled by the Treasury Department.

It is part of a sweeping blueprint to overhaul the nation’s financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now seen as the worst financial crisis in decades.

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One thought on “US to propose sweeping new powers for Fed: report

  1. Time to sharpen the pitchforks. While Americans are busy seeing who can throw the most balls through a hoop, this sneek attack is under way. This proposed plan was in place two months prior to the sub-prime fall-out (June 2007). Why wasn’t it enacted then…or at least talked about. This is a blatant case of “making us sick and selling us a cure”.

    The language used, is to me, cause for great alarm…”broad and sweeping” sounds just like the Patriot Act!!! And any thinking person knows that just like the Patriot Act it takes months if not years to craft this type of proposal. Which leads me to believe that the current recession was not only known about way in advance but allowed to happen, much like 9/11 in order to allow the “big grab” that is underway via the power elite and facilitated like a good lap-dogs by the Bush Administration.



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