WASHINGTON - U.S. Federal Reserve chairman Ben Bernanke’s nomination to a second term will be the subject of a Senate Banking Committee hearing next month, the panel’s chairman said Friday.
President Barack Obama nominated Bernanke to another four-year term in August. The nomination requires Senate approval.
Bernanke has drawn both praise and criticism for his creative thinking and unconventional actions to pull the country back from economic ruin last year.
His decision to bail out insurance giant American International Group Inc. was especially controversial. Many fear that and other rescues will encourage companies to make reckless gambles because the government will clean up their messes. AIG has received a bailout valued at more than US$180 billion, putting taxpayers at risk.
Bernanke’s activist response to the financial crisis has opened the Fed to political fallout. Some lawmakers think the central bank overstepped its bounds - by helping some companies and not others - and by creating some emergency lending programs for banks to tap.
Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee, said Bernanke’s nomination hearing will occur on Dec. 3.
Dodd, who has been critical of the Fed’s failures to spot problems that contributed to the financial crisis, has proposed legislation stripping the central bank of its long-standing authority to regulate banks. That approach runs counter to what the Obama administration wants to see as Congress revamps the nation’s financial rule book and oversight to better safeguard against future financial crises.
Meanwhile, Representative Ron Paul, (R-Texas), has led efforts in Congress to open the notoriously secretive Fed to audits. Bernanke fears that runs the risk of injecting Congress into Fed decisions involving interest rate policy. Those decisions must continue to be made without political interference, Bernanke has argued.
First tapped by President George W. Bush, Bernanke has run the central bank since February 2006. He succeeded Alan Greenspan, who oversaw the Fed for 18 years.
