April 18 (Bloomberg) -- Former Federal Reserve Chairman Paul Volcker said Congress will probably review the authority granted to the Fed following emergency credit programs doubling the central bankâs balance sheet to $2.19 trillion.
âI donât think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken,â Volcker, head of President Barack Obamaâs Economic Recovery Advisory Board, said today at a conference at Vanderbilt University in Nashville, Tennessee.
U.S. lawmakers from both political parties have expressed concern in recent months that the central bank has overstepped its authority by creating several emergency credit programs aimed at reviving lending and ending the recession.
âI think for better or for worse we are at a point where the Federal Reserve Act, after all that has been happening in the last year or more, is going to be reviewed,â Volcker said.
Under the act the central bank may in âunusual and exigent circumstancesâ lend to âany individual, partnership, or corporationâ as long as the loans are secured âto the satisfactionâ of the Fed.
Lawmakers including House Financial Services Committee Chairman Barney Frank have said Congress should consider revising the Depression-era emergency provision.
The central bank has been using such powers âwith great abandon,â Frank, a Massachusetts Democrat, told reporters in January. âUltimately we have to do something about this statute.â
Volcker didnât predict the future powers of the central bank.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ainh3qdHJuoM&refer=home
âI donât think the political system will tolerate the degree of activity that the Federal Reserve, in conjunction with the Treasury, has taken,â Volcker, head of President Barack Obamaâs Economic Recovery Advisory Board, said today at a conference at Vanderbilt University in Nashville, Tennessee.
U.S. lawmakers from both political parties have expressed concern in recent months that the central bank has overstepped its authority by creating several emergency credit programs aimed at reviving lending and ending the recession.
âI think for better or for worse we are at a point where the Federal Reserve Act, after all that has been happening in the last year or more, is going to be reviewed,â Volcker said.
Under the act the central bank may in âunusual and exigent circumstancesâ lend to âany individual, partnership, or corporationâ as long as the loans are secured âto the satisfactionâ of the Fed.
Lawmakers including House Financial Services Committee Chairman Barney Frank have said Congress should consider revising the Depression-era emergency provision.
The central bank has been using such powers âwith great abandon,â Frank, a Massachusetts Democrat, told reporters in January. âUltimately we have to do something about this statute.â
Volcker didnât predict the future powers of the central bank.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ainh3qdHJuoM&refer=home
