In an effort to help prevent future financial crisis, the Bush Administration has proposed a complete overhaul of the financial system currently in place. Included in this plan is increasing the role the Fed plays in the financial market; “rather than checking on the health of a particular organization, the Fed’s focus would be on whether a firm’s or industry’s practices pose a danger to overall financial stability. . .”
Democrats say the administration needs to be focusing on relief right now, not attempting to prevent future problems.
“The Consumer Federation of America accused the Fed of failing to heed warnings about risky mortgages that triggered the meltdown in credit markets in the first place and questioned expanding its scope. ‘Giving the Fed new responsibility to monitor market risks will do nothing if it is not accompanied by much broader authority for the Federal Reserve to act than this proposal provides, and even more important, by a willingness for the Federal Reserve to use the authority it has.'” (more)Print Story