senate banking committee

Krugman’s Fannie Mae Fantasyland

An insightful op-ed in yesterday’s Financial Times by Raghu Rajan (who will be presenting his latest book soon here at Cato), apparently was too much for Paul Krugman to bear.  What was Rajan’s great crime that so upset Krugman?  Rajan, correctly, pointed out that US policies, such as Fannie Mae and the Community Re-investment Act, were direct contributors to the financial crisis and that bankers shouldn’t be bl

The ‘Dodd Rule’ on Nominations

Obama’s recent nomination of Jeremy Stein and Jerome Powell to the Board of Governors of the Federal Reserve System raises an important question: How should the Senate treat nominations whose terms are likely to run beyond the term of the current president? If confirmed, Stein could serve until 2018 and Powell until 2014. Of course this pales in comparison to current governor Janet Yellen, whose term runs until 2024.  With or without Stein and Powell, Obama nominations will have control of the Federal Reserve for years to come.

What Do Peter Diamond and Paul Pate Have in Common?

You might have heard of Peter Diamond, he recently won the Nobel Prize in Economics and earlier this week withdrew his nomination to the Federal Reserve Board. But maybe you have not heard of Paul Pate.

Mr. Pate, former Republican mayor of Cedar Rapids, Iowa was nominated by President Bush in 2003 to fill a seat on the board of the National Institute of Building Sciences. I remember it well, as I handled that nomination as staff for the Senate Banking Committee.

Volcker Rule Misses the Mark

Today Paul Volcker appears before the Senate Banking Committee to argue for the separation of proprietary trading and commercial banking.  In Mr. Volcker’s own works “what we plainly need are authority and methods to minimize the occurrence of those failures that threaten the basic fabric of financial markets.”

Using his own test, the Volcker Rule fails miserably.  Had this rule been in place say five or even ten years ago, we’d most likely be in the same place we are today.  It would have not avoided the crisis, and may potentially have made it worse.

Beginning of the End for Bernanke

Fed Chairman Bernanke’s term as Chair ends in January 2010. So far President Obama has offered Bernanke praise for his performance, but little else. After last week’s House Oversight Committee hearing focusing on Bernanke’s role in Bank of America’s purchase of Merrill Lynch, it is now readily apparent that the Chairman has few supporters on Capitol Hill.

Subscribe to RSS - senate banking committee