The Federal Reserve remains private dominated. The members and the mindset remain those of the private banks.
Yet President Obama would (to quote the Wall Street Journal):
- Give the federal government power to take over and wind down a large financial company.
- Mandate that large financial institutions raise more capital and meet higher liquidity standards.
- Give the Federal Reserve more power over payments and settlement systems.
- Give the Fed power to oversee almost any financial institution in the U.S., including firms' foreign affiliates.
- Allow the Fed to oversee any commercial company that owns a banking charter.
BEFORE, the Fed had the task of monitoring monetary policy, an task you might expect a group of private bankers, with a few government-appointed supervisors, to fulfil adequately.
But this proposal goes way beyond what they can democratically be trusted with.
Either Obama plans to change the Federal Reserve's composition and supervision, or this won't get through Congress.