U.S. News: Fed Emerging Intact From Challenge to Its Power
As the House and Senate move to finalize regulatory-overhaul legislation, the Federal Reserve has emerged as likely to retain most of the power and independence Fed officials have feared they might lose.</br></br>On Thursday, senators on a panel meant to reconcile competing versions of the bill voted 10-2 to kill a provision that would have made the president of the Federal Reserve Bank of New York a White House appointment. The position is now an internal Fed appointee. Fed officials said the change would have politicized the institution.</br></br>Lawmakers' efforts to remake the Fed comes amid popular angst directed toward the central bank for its failure to head off the financial crisis and for the dramatic corporate rescues it engineered.</br></br>A rethink of the Fed has been part of the broader financial overhaul legislation expected to be completed in Congress this month. The House-Senate conference also has resisted a House attempt -- popular in Congress but adamantly opposed by the Fed -- to subject the Fed's interest-rate decisions to regular audits by the Government Accountability Office, which Congress oversees.</br></br>In a tentative compromise, the GAO would gain authority to scrutinize the Fed's 2008 crisis decisions and the Fed would disclose, with a two-year lag, details of loans it makes to banks through its discount window. The Fed now does not disclose discount window loans.