President Obama disagrees. As such, he wants to give the fed even more power.
The Federal Reserve could become the super cop for "too big to fail" companies capable of causing another financial meltdown under a proposal being seriously considered by the White House..
The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.
Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring system wide risk
So, now not only will the Fed control the WORLD'S MONEY supply, but it will be there to measure "systemic risk" of the entire financial system. (this is on top of their duties of regulating the banking industry) Keep in mind that the Federal Reserve is SELECTED not ELECTED, and as such, the chairperson is answerable only to the President. Of course, since most presidents aren't nearly as financially astute as the fed chairmen, in reality, they are answerable to no one.,
I, along with others, put much of the blame for the fruits of this crisis on the schizophrenic interest rate policy the Fed has championed since the late 1990's.
In other words, for the last ten years, and thus, the Fed hasn't done a very good job managing its main function, controlling the money supply. Apparently the answer to their incompetence is to give the Fed even more power.
For my views on how to reform the Fed, go here.