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Fallout: The Financial Crisis

Obama wants Bernanke back for more

Amy Scott Aug 25, 2009
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Fallout: The Financial Crisis

Obama wants Bernanke back for more

Amy Scott Aug 25, 2009
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TEXT OF STORY

Tess Vigeland: Speaking in, of all places, an elementary school gymnasium, President Obama made it official today. He wants Ben Bernanke to stick around for another term as Fed chairman. Another term of steering the U.S. economy out of recession. Another term of dodging inflation. Another term of dealing with critics in Congress and elsewhere. Our New York bureau chief Amy Scott takes a look at the fight shaping up over the Fed’s authority.


AMY SCOTT: Fed watchers say Bernanke’s confirmation should be pretty smooth going. Charles Calomiris is a professor of financial institutions at Columbia Business School.

CHARLES CALOMIRIS: My best guess is that there’ll be some posturing, but that he’ll get through.

Some of that posturing might come from Senate Banking Committee Chairman Christopher Dodd. He’s criticized the Fed chairman for his response to the financial crisis.

In a statement today Dodd said reappointing Bernanke is probably the right choice. But he said he expects many serious questions will be raised about the role of the Federal Reserve moving forward.

Congress is debating how much power the Fed should have in a new regulatory regime. Bernanke has lobbied for expanding the Fed’s oversight.

The Milken Institute’s James Barth says Bernanke’s wish for the Fed to become a sort of super-regulator, keeping an eye on the whole system, could take some power away from other agencies.

JAMES BARTH: But obviously the heads of the other regulatory agencies beg to differ with his particular point of view.

Yesterday a federal judge chipped away at Fed power. She ruled that the central bank has to name the banks that borrowed money from its emergency lending programs.

In New York, I’m Amy Scott for Marketplace.

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