As companions, read please see: Ron Paul Revolution Excerpts: Economic Freedom and Ron Paul Revolution Excerpts: Money."
"Congress urged to grant wider powers to Fed; Bernanke, Paulson: Failures are possible" by Associated Press | July 11, 2008
WASHINGTON - The nation's top economic officials yesterday urged Congress to give them new regulatory tools to better protect the country from economic and financial havoc if a major Wall Street firm were to fail.
Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson made the recommendations in a joint appearance before the House Financial Services Committee as fresh worries gripped investors about the financial shape of mortgage giants Fannie Mae and Freddie Mac as well as investment bank Lehman Brothers Holdings Inc.
Both Bernanke and Paulson endorsed creating procedures by which the government can guide an orderly liquidation of a failing investment bank in an effort to minimize any fallout that might be inflicted on the broader financial system and the overall economy. Such procedures, which are in place for commercial banks, might have made the dissolution of investment firm Bear Stearns more orderly.
Although Bernanke defended the Fed's decision to financially back JPMorgan Chase's takeover of Bear Stearns, the Fed chief said, "This is not something I want to do again" were other investment firms to falter.
Given a crush of other business, Congress is unlikely to give financial regulators new powers this year. It will be for the next president and the next Congress to grapple with.
Then why is this being passed of as news.
New powers could help insulate the financial system - US taxpayers - from getting walloped if a big financial company were to collapse, Bernanke and Paulson said.
That is SUCH BULL!
Read the above posts coming, and you will see what TOTAL BULLSHIT that is!!!!
"In light of the Bear Stearns episode, Congress may wish to consider whether new tools are needed for ensuring an orderly liquidation of a systemically important securities firm that is on the verge of bankruptcy, together with a more formal process for deciding when to use those tools," Bernanke said.
Paulson, who recently laid out such a proposal, said: "It is clear that some institutions, if they fail, can have a systemic impact." However, financial players need to be disciplined in managing risk and not expect the government to fly to their rescue, he added. "For market discipline to effectively constrain risk, financial institutions must be allowed to fail," he said.
In principal, I agree; however, the same logic doesn't seem to be applied to BANKS or WAR-PROFITEERS, so.... pfffffffttt!
Besides, Paulson is a LIAR!
"We must limit the perception that some institutions are either too big or too interconnected to fail," Paulson added. "If we are to do that credibly, we must address the reality that some are."
The recommendations were part of a broader debate about the best ways to revamp the antiquated regulatory system. The idea is to brace the system to better respond to modern-day crises like the housing and credit debacles that have badly bruised the economy.
Yeah, right; the guys who FUCKED IT UP on PURPOSE are going to fix it for you and me! Next item!!
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