The Shrinking Influence of the US Federal Reserve

[FarCenter]

By Gabor Steingart in Washington -- http://www.spiegel.de/international/world/0,1518,562291,00.html

Humiliation for Mr. Dollar: Ben Bernanke, the chairman of the United States Federal Reserve Bank, faces a general investigation by the International Monetary Fund. Just one more example of the Fed losing its power.

...

Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States. It is nothing less than an X-ray of the entire US financial system.

As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar.

Under its bylaws, the IMF is charged with the supervision of the international monetary system. Roughly two-thirds of IMF members -- but never the United States -- have already endured this painful procedure. For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.

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[DJ13]

1. The Federal Reserve & the Bush administration have no one to blame but themselves

Between the Fed's easy money policies and the long standing GOP platform of no regulatory oversight that Bush has followed, our finances have gone to crap.

[truedelphi]

2. Jim Rogers, one of the world's top investment speculaters

Has moved to the Orient, in part because he thinks our central bank has little in the way of ensuring that it handles itself properly. He prefers the Chinese central bank to ours.

[unblock]

3. bush's condition is that it can't be completed until he's out of office.

how transparently, selfishly political.