Markets

New Powers for Fed

Here's a potential mountain in the new financial landscape: According to The Washington Post, Congress is in talks to grant the Federal Reserve more financial oversight and allow it to analyze the inner workings of banks, investment firms, and insurance companies. Currently, no agency is responsible for understanding the risks of the entire financial system, and the meltdown of insurance firm AIG made the lack of understanding all too clear. "We need to give some regulator the power to restrain risk-taking that is excessive," said House Financial Services Committee Chairman Barney Frank, who leads the legislation, which could be finalized by the House in Spring. The Fed currently operates with review by congressional authorities, and some officials are concerned the regulation plan could threaten the Fed's traditional independence and place too much power in one agency.