The Wall Street Journal reports that senate may push for shake-up of regional fed banks.
(emphasis mine) [my comment]
APRIL 2, 2009, 7:05 P.M. ET
Senate May Push for Shake-Up of Regional Fed Banks
By JON HILSENRATH
The Senate signaled that lawmakers could push for a shake-up of the 12 regional Federal Reserve banks that are central players in the Fed's decision-making process and market oversight.
In a nonbinding resolution that passed 96-2, the Senate called for "an evaluation of the appropriate number and the associated costs of Federal reserve banks."
In addition to the Federal Reserve Board in Washington, the Fed system has 12 regional Fed banks around the country. They rotate on the Federal Open Market Committee in casting votes on Fed interest-rate policy. The New York Fed also has been at the center of government financial-rescue efforts.
Currently, Congress has no say in the naming of bank presidents. But given the New York Fed's prominent role in rescue efforts, some lawmakers are keen to re-evalute the system. [Good idea. The current system is flawed.]
The resolution was sponsored by Sen. Christopher Dodd, (D., Conn.), the chairman of the Senate Banking Committee, and Sen. Richard Shelby, (R., Ala.), the ranking Republican on the committee.
In two other resolutions, the Senate called for the central bank to disclose more information about its loans to firms during the financial crisis. [This is great.]
My reaction: Wow, this could get interesting. Congress looks like it is finally starting to re-evaluate the way the Federal Reserve System works. This is overdue and is definitely a positive development.