Bernanke Fires Back on the Role of the Fed

The latest shots in the battle for control of the US financial system have been fired as Ben Bernanke pushed back against the idea that the Fed needs additional Congressional oversight. While one should be mindful of the source, Chairman Bernanke's latest comments suggest that further oversight of the Fed would have a detrimental effect on the economy. Although he can point to studies showing inflationary effects stemming from central bank oversight, this is more likely just political wrangling ahead of the inevitable upcoming changes to the banking system. Observers should expect that this type of back and forth will continue until substantive legislation results in a new financial system framework.