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Published On: Sun, Mar 14th, 2010

Chris Dodd’s Bill gives Federal Reserve more control over banks

Senate democrat Chris Dodd is unveiling new banking legislation on Monday that will increase the Federal Reserve’s grip on financial institutions. The bill is intended to gain authority over new non-banking financial firms and tighten the grip on firms already in their control.

Previously, the Federal Reserve had oversight over bank holding companies whose assets were $100 billion. Under Dodd’s Bill, it will lower the threshold to $50 billion. What this does is allow more banks to fall into their control.

The Federal Reserve has taken a lot of heat concerning the financial meltdown of the world economies and now they may actually be given more power to oversee the banks. This is where I get a little confused.

If the Federal Reserve was already in charge of super banks like Bank of America and AIG, then how did they slip through the cracks?

Was it because they didn’t have enough power? The answer is no.
They already had too much power. The reason the banks failed was because they were allowed to. They mismanaged their investments and instead of losing, they got a do-over from the government. The Feds lack of oversight shows how incapable they were in the first place. Now we are going to give them more control over more banks?

The FDIC is a joke and it was initially proposed that they manage the banks. The new version of the bill has changed that. The FDIC has no money and they couldn’t bailout the U.S. banks even if they did have the Treasury’s printing press.

On one hand, Dodd is saying he wants banks to know that they aren’t too big to fail yet he writes an agreement that a fund of about $50 billion should be created to help pay for the cost of unwinding large troubled firms. One of the central points in the bill would give the government the power to seize and dismantle a large, failing financial company. In other words, government takeover of banks.

The bill includes Obama’s Financial watchdog group which will be housed under the Fed.

If we don’t want the government in our bank accounts, we should think twice about supporting this type of legislation. While on the surface it seems that this legislation may protect us, in the long run it will take away our ability to bank freely.

We should have let them fail the way capitalism intended.

On the DISPATCH: Headlines  Local  Opinion

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About the Author

- Writer, Co-Founder and Executive Editor of The Global Dispatch. Robert has been covering news in the areas of health, world news and politics for a variety of online news sources. He is also the Editor-in-Chief of the website, Outbreak News Today and hosts the podcast, Outbreak News Interviews on iTunes, Stitcher and Spotify Robert is politically Independent and a born again Christian Follow @bactiman63

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