Now, Damian Paletta at WSJ is reporting that Treasury Deputy Secretary Neil Wolin stepped in to defend the Fed:
Mr. Wolin, speaking to the American Bar Association’s Banking Law Committee in Washington, said “no regulator had a perfect record leading up to the crisis” but “the Federal Reserve is the agency best equipped for the task of supervising the largest, most complex firms.”This is beginning to sound like a coordinated insider defense of the Fed, which means Bernanke is still sweating.
He said the Fed “is the only agency with broad and deep knowledge of financial institutions and the capital markets necessary to do the job effectively.”
“In addition, the Fed’s role as lender of last resort depends importantly on its supervision of the largest, most interconnected firms. Supervision gives it deep understanding and timely access to information about the banking sector, payments systems, and capital markets. Stripped of its supervisory role, the Fed would not have timely and complete information in a crisis.”
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