…is never, ever Timmay. The US Senate, moving at its usual lightning pace, has almost sort-of agreed in principle to an outline of a plan to form a committee to explore the possibility of creating a council that may or may not identify systemic risks to the nation’s financial system. This is what passes for a victory for reform.
This council would be led by the Treasury Secretary, which sounds like such a fabulous idea if you remember what happened when Timmay ran the NY Fed. Timmay has proven himself willing to stand up and speak up when he sees things going wrong, except for all those times he did neither. Other members of the council would include an effeminate elf, a manly dwarf, a bearded wizard, two men, and three more teeny hobbits.
The bearded wizard, Bernanke, is just glad to still have a job and seems to be on board with handing over some of the Fed’s responsibilities to someone else so that next time he can spread the blame around a little more.
Assigning the Treasury Department the job of spotting incipient trouble and addressing it quickly has support among senators from both parties, though several important provisions, including whether the council would have the ability to bypass existing banking regulators and impose its own rules on huge financial firms, remain to be worked out.
The effect would be to diminish the authority of the Federal Reserve, whose regulation of banks has been criticized for failing to head off the problems.
Though some in the Fed continue to push for the central bank to be the overseer of systemic risk, the chairman, Ben S. Bernanke, is willing to go along with a Treasury-led council.
If you’re skeptical that having a council made up of regulators for whom the council is their second (or third) job is going to solve all our problems, you’re not alone.
But some in the Fed remain skeptical. James Bullard, president of the St. Louis Fed, said in an interview [...] “But I’m telling you, this business of how we’re going to give this to a committee and we’re going to have an effective response to the next crisis. That is a joke.”
Ha ha ha, jokes are funny.