Bernanke To CFR: New Financial Authority Is
Needed
"Reform of financial regulation and supervision
should be coordinated internationally to the greatest
extent possible."
Federal Reserve Chairman Ben Bernanke has told an elite gathering
that a new overarching financial authority should be created
by the government and empowered with sweeping new regulatory
responsibilities.
Bernanke also coyly indicted to the renowned globalist
group that he believes a new international order could be fomented
out of the crisis.
"We must have a strategy that regulates the
financial system as a whole, in a holistic way, not just its
individual components," Bernanke said in a speech
to the Council on Foreign Relations.
"We should consider whether the creation
of an authority specifically charged with monitoring and addressing
systemic risks would help protect the system from financial
crises like the one we are currently experiencing." he
added.
Large firms will require “especially close”
oversight in the future, Bernanke noted, adding that regulators
need the authority to seize such firms.
"Some of the policies I propose can be implemented
and developed under the existing authorities of financial regulators,
indeed we are in the process now of doing just that. But in
other cases, Congressional action will be necessary to create
the requisite authorities and responsibilities." Bernanke
said.
While he didn't specify which regulator should
take that job, he noted that the Fed was first formed to address
banking panics and said the initiative would “require”
some role for the central bank.
"Effectively identifying and addressing systemic
risks would seem to require the involvement of the Federal Reserve
in some capacity, even if not in the lead role," Bernanke
said.
“Given how important robust payment and
settlement systems are to financial stability, a good case can
be made for granting the Federal Reserve explicit oversight
authority for systemically important payment and settlement
systems,” he added.
Essentially Bernanke suggested that even more
power be granted to the Federal Reserve, a private banking institution
that has already failed as a regulatory body and led us into
the current crisis through it's engineered inflation of the
credit bubble under Alan Greenspan.
Bernanke's suggestions echo those of Paul Volcker, an Obama
adviser and former Fed chairman, who called for a similar regulatory
crackdown in January, along with other members of the elite
Group of Thirty.
(Article continues below)
Much to the delight of globalist CFR members, Bernanke also
spoke of the international implications of the economic crisis
during his speech.
"I also will not say much about the international dimensions
of the issue but will take as self-evident that, in light of
the global nature of financial institutions and markets, the
reform of financial regulation and supervision should be coordinated
internationally to the greatest extent possible." he said.
Bernanke expanded on these comments in a revealing question-and-answer
session after the speech.
Commenting on the upcoming meeting of financial heads of the
G20 in London, Bernanke stated:
"From the perspective of the G20, the focus should be
on the International aspects, obviously, of this crisis. I talked
today primarily of what the United States can do and I left
implicit, perhaps I shouldn't have in front of the Council On
Foreign Relations, the fact that this is very much an international
problem, and it requires international solutions."
"We need to begin to establish a framework... The better
goal for a meeting of leaders would be as much as possible to
establish some principles that would guide reforms around the
world... they need to work for institutions and for markets
that cross borders. We have banks and insurance companies that
have subsidiaries in 100 or 120 countries, and there are so
many jurisdictions, that dealing with problems in one of those
companies is extraordinarily complicated. In order to do that
successfully, we need to have agreements, conventions, that
will help us work across jurisdictions in an effective and cooperative
way."
The CFR was keen to highlight these comments in it's write
up of Bernanke's visit.
Watch video of the question and answer session:
Bernanke reiterated that the central bank, U.S. Treasury and
other regulators “will take any necessary and appropriate
steps” to ensure banks have capital to “function
well in even a severe economic downturn.”
“Governments around the world must continue
to take forceful and, when appropriate, coordinated actions
to restore financial market functioning and the flow of credit,”
The Fed chief said.
Bernanke conceded that world is suffering from the worst financial
crisis since the 1930s, a remarkable U-turn given that just
months ago he described
such comparisons as "loose talk" urging
that we "put that out of our minds".
And though respected economists, such as Nouriel
Roubini, have stated that those who believe in
a second half recovery this year “are delusional”,
Bernanke suggested that the downturn could indeed end this year.
Federal Reserve Chairman Ben Bernanke has told an elite gathering
that a new overarching financial authority should be created
by the government and empowered with sweeping new regulatory
responsibilities.
