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The Federal Reserve funds itself, making money on the buying and selling and holding of U.S. government and mortgage-backed securities, among other things. After paying its expenses, any profits go to the U.S. Treasury. It prizes this independence from the congressional appropriations process.
It seems the Senate Banking Committee has discovered the advantages of what one might call off-balance-sheet financing. In the latest version of the financial-regulatory bill unveiled by Chairman Chris Dodd on Monday, the committee shifts the budgets of all financial consumer-protection activities from half a dozen federal agencies to the Fed –- and then makes explicit that the Fed would have little say over what the new consumer bureau, to be headed by a presidential appointee, would do.
Then there's a new Office of Financial Research to be established inside the Treasury to advise a new council of regulators. The Treasury budget, of course, is appropriated by Congress, but not this office.
The Fed would foot the bill for the next two years, then the Treasury secretary is to assess the largest financial institutions to cover the costs. “To the extent that the assessments?do not fully cover the total expenses of the office, the [Federal Reserve] Board of Governors shall provide to the office an amount sufficient to cover the difference,” the Dodd bill says.
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My concern with the new Office of Financial Research is that it codifies the sharing of information only with regulators.
It becomes a substitute for sharing information with investors and public markets as a means of creating market stability.
This represents a 180 degree turn from the ‘33 Securities Act passed by the Roosevelt administration which sought to bring sunlight to the dark ways of Wall Street.
Gathering information for regulators in a centralized manner is useful but all information should be shared with market participants if possible.
We may look back at this legislation and wonder if it marks the point where our markets became less transparent.
More at Riski: http://freerisk.org/wiki/index.php/Transparency
That’s right WSW,glad you agree! Absolutely a logical slection for the criminals.
A logical selection!
Cool a major NWO globalist REPO 105 Wendy Gramm Enron Jedi accounting exercise to give some more enabler cronies to make some super salaries and have massive amounts of taxpayer money vanish into thin air down the line squeezing the last bit of lifeblood out of them. which is just what we need. Maybe Matt and Tanya can repossess the government and Fraudulent FED in the name of the american people. The Bilderberg Ponzi scheme keeps expanding. A total misdirection play, don’t believe any of this bogus junk. It’s like going back to the 1950’s and reading a Pravda USSR memo release. That system collapsed on itself too and the fiat farce won’t be far behind.
Real Time Economics offers exclusive news, analysis and commentary on the economy, Federal Reserve policy and economics. The Wall Street Journal's Phil Izzo and Sudeep Reddy are the lead writers, with contributions from other Journal reporters and editors. Send news items, comments and questions to realtimeeconomics@wsj.com. Read more Economics coverage.
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