Paulson pushes for more power to the Fed

The Federal Reserve should be given a greater role in the oversight of financial institutions, says Paulson

WASHINGTON DC – In his latest speech, US Treasury Secretary Henry Paulson has continued to push for more power for the Federal Reserve in the oversight of financial institutions. The credit crisis brought the inadequacies of the US financial regulatory structure into sharp relief, and in his so-called Blueprint published in March, Paulson stated that the Fed should have overall responsibility for market stability. Given the fact that the Bush administration has only a little more than 200 days to run, Paulson wants to speed up regulatory change.

He said: "We should quickly consider how most appropriately to give the Fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene in order to protect the system, so they can carry out the role our nation has come to expect - stabilising the overall system when it is threatened.”

Paulson did not specify how the US Treasury could implement the changes he suggests, but it is possible his department could bypass Congress and do so administratively.