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Wednesday, February 15, 2006

Why Greenspan Retired

From the WSJ's Washington Wire reporting on Bernanke's testimony, news of why Greenspan retired even though legislation by Rep. Brad Sherman (D., Calif.) to extend his term was in the works. A sole but influential opponent stopped the legislation. In other notes, Bernanke opposes Wal-Mart's entry into banking services, wants tougher legislation for Sallie Mae and Freddie Mac, and refuses to comment on the propriety of Greenspan's dinner with clients of Lehman Brothers:

The Chairman Speaks Regularly, Washington Wire, WSJ: Bernanke endorses a bill ... to close a loophole that lets commercial companies own FDIC-insured "industrial loan corporations," like the one Wal-Mart Stores Inc. wants to operate in Utah. ... The bill, Bernanke said, would "relieve our anxieties considerably." But he didn't endorse a House bill that would tighten regulation of Fannie Mae and Freddie Mac. The measure ... "doesn't provide sufficient guidance" to regulators to limit their portfolios. "...these large portfolios represent a risk to financial stability,'' he warned.

Asked about former Fed Chairman Alan Greenspan's reported remarks to select audiences since leaving the Fed..., Bernanke said: "My only comment ... is that, according to government ethics rules and to FOMC rules, it's permissible for a retired governor to speak in public about the economy, so long as he or she does not divulge confidential information. And I have no indication that he has violated that rule. And I have no further comment on that."

Rep. Brad Sherman (D., Calif.) told Bernanke he was the only member of the House Financial Services Committee to work actively to thwart his appointment as chairman of the Federal Reserve Board. "Ben, it's nothing personal," the congressman said. "I simply authored legislation to extend your predecessor's term limits. You owe your office to that bill's sole and very powerful opponent: Andrea Mitchell."

Economist's react, me included, to Bernanke's testimony. There were also two Fed speeches over the last two days:

Jeff lacker, Richmond Fed President on Transition and Continuity at the Federal Reserve in 2006.

Richard Fisher, Dallas Fed President on Trade Deficits and the Health of the U.S. Economy.

    Posted by on Wednesday, February 15, 2006 at 02:13 PM in Economics, Fed Speeches, Monetary Policy | Permalink  TrackBack (0)  Comments (0)

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