in my view, congress has wisely granted the federal reserve the freedom to make independent monetary policy decisions in pursuit of congressionally mandated goals, based on a forward-looking perspective and the best judgments of the federal open market committee participants. i believe that experience in the united states and around the globe demonstrates that central bank independence in monetary policy produces clearer it societal benefits. . . they are evaluating the policy decision. when i am committed to enhancing the transparency. it is essential to accountability and democratic legitimacy. >> to be nominated by president obama, to be a member of the federal reserve system. i am grateful to this committee for scheduling this hearing. if i am confirmed by the senate, i will work to the best of my abilities to fulfill the responsibilities of this office panetta to office. his responsibilities have always been significant. the experience of the recent financial crisis have underlined the multiple jobs the fed has been working to fill the dole mandate of high employment and price st

in my view, congress has wisely granted the federal reserve the freedom to make independent monetary policy decisions in pursuit of congressionally mandated goals, based on a forward-looking perspective and the best judgments of the federal open market committee participants. i believe that experience in the united states and around the globe demonstrates that central bank independence in monetary policy produces clearer it societal benefits. when central banks are independent, economies perform better, inflation is lower and more stable, and interest rates are less volatile. in other words, an independent central bank is best equipped to promote both price stability and high levels of growth and employment. i should stress that independence brings with it both responsibility and accountability. the federal reserve is fully accountable to congress, and that is how it should be. that means the fed must explain its actions, outlook, and strategy, and provide the information necessary for congress and the public to understand and evaluate the policy decisions. i strongly support fed inde

>> the federal reserve? >>he federal reserve, i'm sorry. >> no, we don't think that a double dip is a high probability event. >> that's good news. you had talked about -- in fact, it was ranking member shelby that had questions on the credit crunch. and the reason for it, you talked about lower demand, you talked about collateral, value decline, you talked abt regulators being especially cautious. i want to touch on that. you said that you were instructing regulators to be more -- have more consistency in the regulation, consistency goes to stability, goes to better lending. how are you evaluating that? >> well, first in terms of what we're doing, we have put out a lot of specific guidance in terms of how you go about making those evaluations. and we have put out guidances about commercial real estate, about small business and a number of other key areas. we've been following it up with very intensive training of the -- the examiners to make sure they understand that there needs to be an appropriate balance

>> the federal reserve? >> the federal reserve, i'm sorry. >> no, we don't think that a double dip is a high probability event. >> that's good news. you had talked about -- in fact, it was ranking member shelby that had questions on the credit crunch. and the reason for it, you talked about lower demand, you talked about collateral, value decline, you talked about regulators being especially cautious. i want to touch on that. you said that you were instructing regulators to be more -- have more consistency in the regulation, consistency goes to stability, goes to better lending. how are you evaluating that? >> well, first in terms of what we're doing, we have put out a lot of specific guidance in terms of how you go about making those evaluations. and we have put out guidances about commercial real estate, about small business and a number of other key areas. we've been following it up with very intensive training of the -- the examiners to make sure they understand that there needs to be an appropriate bala

the bureau is housed physically at the federal reserve but no federal reserve towers can be exercised. what it is is a way to get some of the revenue that the federal reserve had been getting for consumer protection and not using very well. and putting them into there. the way i put it is that the mailing awe stress for the consumer bureau will be the federal reserve. no one at the federal reserve can open any of that mail. it's a fully independent consumer agency and there was no power on any federal reserve, in fact the federal reserve at this point was frankly annoyed saying we can't do anything about it. and that's the problem on our part. >> charlie: freddy mac and fannie mae. >> yes. as i said the republicans when they controlled congress for 12 years did nothing about fannie mae and freddie mac. they fought among themselves, passed no legislation. i originally thought we didn't need to. in 2004 when george bush ordered them to increase the number of mortgages to over 50% that they bought from lower income people, i objected. i said that was bad for them and bad for the buyers o

they ended up putting it within the federal reserve as a bureau, although technically the federal reserve cannot tell it what to do, but it just gets its money from the federal reserve. it will be confusing for many people, but it is not really the federal reserve who will enforce the new rules. it will be the new bureau of the federal reserve. i do not know its acronym yet. yes, it will be writing rules and forcing them against private companies. host: the new budget would be around $500 million. how much is the budget for the federal reserve? guest: i do not know. it is not appropriated by congress. it comes from big holdings of the federal reserve, and from a percentage of that. host: it is not taxpayer money? guest: may be indirectly it is. the federal reserve is a division of the government, but is not appropriate by congress every year. host: congress would not be able to appropriate money for a given purpose? guest: that is right. host: james, on the caller: republican line they seem to be protecting themselves. they make sales, and if the sales don't go through, and go through a c

over the past couple of years, the federal reserve and other agencies have been working to stabilize the financial system and the economy. this has included working to falitate credit for small business. at the federal reserv we were helping to build capital and the securities market to the asset- backed securities loan facility. more than 850,000 small-business loans were financed by securities issued through the troubled bus the relief program. and we would like the banks to resume normal lending as soon as possible. the stress tests that we project -- we took last year allowed the banks to raise the capital that they need to offset losses and ultimately, to provide a basis for lending. we have heard the often- expressed concern that the bank examiners have prevented banks from making good loans. we take this very seriously. the feder reserve has to working with the other banking regulators to develop policy statements on this issue, and that t bank examiners. the message is clear. consistent with maintaining prudent standards, the lenders should do everything they can to meet the

this is a challenging moment for the federal reserve. every member of this committee knows that, even though the worst of the crisis is over, it remains a precarious time for far too many of our families and business. the fed must do its part to restore the underlying strength and vibrancy of the american economy. as maryland's commissioner of financial regulation over the last four years, i worked day and night to cover the devastating effects on our committee of the banking liquidity crisis and high unemployment and underemployment. at the same time, as a front- line bank regulator, i worked to revise and replacing effectual and counterproductive state regulation. if i am confirmed, my experience will deeply informs my actions at the federal reserve board. over the course of the last generation, the federal reserve has achieved price stability and successfully anchored long-term inflationary expectations. this achievement is critical to our economic strength and it remains a central institutional objective that i subscribe to wholehear

but speaking of the federal reserve this is another thing being voted on by senators in the next few days is that they're voting on three new federal governors obama has nominated and i want to check out this video it's grant discusses potential new federal reserve governors this is jim grant of grant's interest rate observer these are people who. think or are likely to oppose novel solutions to a fundamental monetary dilemma which is that the u.s. dollar is the face based currency of the intrinsic value that is manipulated by the . consequences of the glaciers are often quite distinctive or different from what was intended that's the problem there let's focus jim grant's words their faith based currency what is the faith in this case it's a broken ideology of neo liberalism and neo keynesianism which has done remarkable amounts of damage that's part of the. really ideology goal destruction that is wreaking deeply into the economy james grant knows it and he's got a really cool balta. he does these go much cuter boats then jim rogers you know jim rogers bow ties time slot but this is

. >> the federal reserve chairman and small business administrator speak at a forum on credit held for small companies. the nation's governors will hear about the federal deficit. and after that, we will have portions of the first day of hearing -- hearings over the gulf oil spill. tomorrow morning on washington journal, will read about credit for small businesses, from a blogger with the atlanta business channel. a former republican representative will take your calls about politics and the congressional agenda. and we will look at the future of the u.s. postal service with the chairman of the postal regulatory commission. washington journal is live every day at 7:00 a.m. eastern. >> our public affairs content is available on television and radio, and online. and you can also connect with us on twitter and facebook, -- >> ben bernanke says that making credit extensible to small businesses is crucial for the economic recovery. speaking at the federal reserve finance conference, he says not enough has been done to help the small companies. this is about half an hour. >> thank you, every

financial entities whose failures hamper the system and housed within the federal reserve. earnings drove the markets higher most of the week last week. the dow snapping a two-day losing streak on monday and rose again on tuesday and on thursday on strong profit news. the markets continued up on friday. not all of the earnings news was good. some big companies falling short on revenue expectations including johnson & johnson, ibm, yahoo and amazon.com. but most companies did come ahead of analyst expectations, apple had a blowout quarter for one, coca-cola, wells fargo, morgan stanley all beating earnings and revenue estimates. as did 3m, caterpillar, at&t, american express, microsoft, all dow components, by the way. meanwhile, federal reserve chairman ben bernanke spooked the marks with the semiannual testimony before the senate banking committee. bernanke said we are seeing, quote, an unusually uncertain economy. he did say though, that he did expect a moderate economy. about bernanke said the federal reserve was prepared to take steps, any steps needed, if the economy di

at the stock markets of europe is growing in the afternoon the rest of the warming to that the federal reserve report this morning personnel forcing growth capital is lending support three percent higher that's off the posting a fifteen percent rise in first half profits but north korea has revealed some bad news off the board to profit fell forty percent to two hundred ninety million dollars experts say the phone maker is lagging behind its small for innovation. here in moscow markets have made up the borders losses there are up almost a percent one of its own two and a half percent higher. than twenty five million dollars last year a thirty percent. pay rise but drew owner of the plan the suffered a terrorist blows yesterday is down. food chain length says he's back in the black the same petersburg based discounts are posted a profit of eleven point three million dollars last year after a twelve point four billion dollar loss in two thousand and eight the firm has thirty seven hypermarkets across eighteen russian cities. now russian social network class nicky the rue says profits increased k

the things that happened actually in 1937 was there were a lot of excess reserves and what the federal reserveid was to change the reserve requirements and just declared that those were now required reserves. what we discovered was banks said, no, no, no, we wanted to hold excess reserves. we've just been through the great depression. they were very nervous and we saw them gathering more excess reserves above the new, higher limit. we have to be careful about figuring what is driving bank behavior. chairman bernanke was talking about what regulators were doing on the ground and how the fed was trying totalk to them about, you know, making creditworthy loans when they were, you know -- when they were -- when there were possibilities to do so. so i do think that, you know, we do need to be careful as we go forward, but there is a certain amount of remembering what a terrible crisis we've been through and how it was a searing experience, not just for american citizens but often for some of these small banks. at was a very frightening time for them as well. you can imagine some of their behavior.

despite the proposal, officials with federal reserve think the risk of widespread deflation are stilllow. federal reserve meeting again on november 10. >>> it was a choppily day of trading as investors weighed in on the anti deflation program set to be released tomorrow. >>> cooler weather is helping fire crews in southern california battle two wildfires that have already destroyed thousands of homes. the bull fire southeast of the town of tehachape has already burned 500 acres. crews hope the cooler weather and lighter winds will help them get a handle on the blaze. >>> and while things are a bit cooler there, here at home we're seeing a slight warm up. let's go to chief meteorologist bill martin. you've been talking about the weather here and how it's been beneficial. >> right, we're not doing a lot of heat advisories or spare the air days. we're dealing with mild temperatures. however i will say this. today was the warmest day of the week so far with some mid- 80s inland. but that's cooler than you would expect. my friends out at steinson beach you got some clearing today. it's bee

these positions are extraordinarily important because of the critical role that the federal reserve plays in our economy, be it through the exercise of monetary policy, the supervision of national institutions, or a slender rose less resort. as arbiter of the nation's federal policies, interest-rate have profound effects on the performance of the real economy. the financial reform legislation that congress is poised to consider, the federal reserve functions will expand. the federal reserve will be charged with seeing the functioning of these complex organizations and and diet -- and identifying the excessive risk-taking that led this country to the verge of near collapse. while the financial reform legislation imposes new conditions, the fed will still retain the awesome power to put billions of dollars of taxpayer money on the line. given his position and our economic system, much depends on how the fed carries out its varied responsibilities. the fed's track record has been mixed. the fed had authority, if used, could have prevented the serious deterioration of mortgage underwriting st

ktvu channel 2 news. >>> the federal reserve chairman when before the congress today and said there is no quick fix for the high unemployment rate. >> a significant amount of time will be required to replace the 8 million jobs lost. >> he is predicting modest growth but calling the overall outlook unusually uncertain end consumer spending would help grow the economy by about 3% this year but bernanke said that u.s. housing market remains weak. >>> wall street turned negative. the dow industrials ended with a triple digit lost in the nasdaq -- and the nasdaq lost 35-point. >>> for a piece by piece guide on how it affects you, click the business tabbed just below the banner on our homepage ktvu.com at. >>> police released video today of a man and woman suspected in of shooting appeared the man was gunned down in the parent robbery on webster street and the surveillance footage was captured by cameras at a nearby office building could they identified the subject as a man and woman african-american and he was in town for a job interview at google the next day. >>> santa clara county sherif

>> the federal reserve has lowered their outlook for the economy this year. although they haven't really lowered it for next year. but not by very much. and it's a bit surprising given how bad the economic data is. they believe that the economy has essentially entered a self-sustaining phase and that even though things are a little tough out there, the financial system is so much healthier than it was a year ago that should carry us forward. but there is another sort of subtext here too which is that if the economy does get a lot worse, there's not a lot the fed can do. i mean remember, they've already lowered short-term interest rates to almost zero. they could do a few more unorthodox things. they've already bought almost $2 trillion worth of bonds of treasury bonds and mortgage bonds. they could buy more. but the fact of the matter is we're in the unusual situation where the federal reserve, to whom we usually turn for help at times like this doesn't have a lot of resources. >> lehrer: so when he says we might do a little something hear or there, it is ver

here's hari sreenivasan in our newsroom. >> sreenivasan: the chairman of the federal reserve promised today to take action to bolster the recovery, if need be. at a senate hearing, ben bernanke voiced concern about slowing growth. >> the economic outlook remains unusually uncertain. we will continue to carefully assess ongoing financial and economic developments, and we remain prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential in a context of price stability. >> sreenivasan: bernanke played down chances the economy will slide back into recession. but he said record low interest rates need to stay in place for an extended period. the mood on wall street turned sour after bernanke spoke. the dow jones industrial average lost 109 points to close at 10,120. the nasdaq fell 35 points to close at 2,187. federal efforts to fight off home foreclosures are not working. that's what a senate committee heard today, from special inspector general neil barofsky. he said foreclosure filings continue unabated, despite programs

the federal reserve knows this, too. and fed watchers say the central bank is working on additional tools to employee in its efforts to revive the economy. it has been at zero for a year and a half. which means there is no shortage of cash. but the economy is sluggish because there is little demand. >> corporations have tons of cash. there is very little reason for a lot of them to go to banks to basically borrow money. on the small business side, there are questions about the health of the economy, so banks are more leery throu. so it is a combination of the bigger borrowers don't necessarily need the money, and the smaller businesses, the banks are concerned about. >> reporter: the fed may lower the interest it pays banks on money they leave idle as reserves. the fed may also modify its policy statement to suggest the fed fund's rate will stay low for a very long time. or according to economist mikely foreli, they could buy more assets. >> if they buy more asserts, i think they would buy more longer dated treasury secu

the year ends to extend the bush cuts for a least a year or two, unless it is coming from the federal reserve. >> charles is wrong on this. tim geithner says that there is no way in the world the tax for those over to -- the taxpayers were to order to be -- the tax breaks for those over to order to be thousand dollars would be extended. -- tim bender says there is no way that the tax breaks for those over to water to the dozen dollars would be extended. if you are talking about doing something about fiscal sanity, and, i would point out, alan greenspan, who is in a blur of the original tax cuts, has told -- who is the any of the original tax cuts, as called for their appeal. >> the head of the federal reserve, by saying he is against increases in taxes, when he is supporting -- is supporting an extension of the cuts. >> the secretary of the treasury is not for extending the tax cuts. i think the republicans have a hard case to make against extending unemployment insurance and keeping the tax cuts on the rich on the books. >> out of the 850,000 americans who have top-secret clearances, about 2

condition had remained relatively stable largely due to the federal assistance provided by the federal reservend treasury. but the extent to which the federal government will recoup its investment remains uncertain and will not only depend on the long-term health of aig but also on the company's success in selling businesses as a restructures and other market factors such as the performance of the insurance companies and the insurance sector and the credit derivatives markets that are beyond the control of aig or the government. many of our reports have also highlighted the challenges facing t.a.r.p. programs and we have mad recommendations to enhance the transparency and accountability of the programs. for example in a recent report on the home affordable modification program we stated the program had made limited progress in preserving homeownership, issevered from a consistent program implemention and continues to confront additional challenges. these include converting tri modifications for permanent status and ensurg programs stability and effective program management. we eported that whi

the federal reserve released its latest beige book survey of business sentiment on wednesday. it shows economic activity slowing in june and july in 2 of the 12 federal reserve districts in the country. they are the midwestern region of chicago and the southern region of atlanta. by industry the report says activity in residential real estate was sluggish in most districts due to the expiration of a tax credit for home buyers. it says manufacturing activity slowed or leveled off in some districts. in the retail sector the report cites a fall in auto sales in recent weeks. fed chairman ben bernanke said in his congressional testimony last week the outlook for the u.s. economy is unusually uncertain. >>> tokyo stocks fell on thursday morning as investors locked in gains following wednesday's surge of more than 250 points. but the nikkei 225 at least ended on the dot at 9,700 points, down half a percent. investors took their cue from the u.s. central bank's latest economic assessment, suggesting the american recovery may be losing steam. and the dollar is losing ground against th

, ben bernanke, in his testimony to congress this week. >> even as the federal reserve continues prudent planning, we also recognize that the economic outlook remains unusually uncertain. >> despite the hardships, optimism lives on. 70% of americans still believe they will some will some day li american dream. >> question, currently americans are resilient. we bounce back. what explains that resilience in americans, pat? >> john, dreams have always died hard in america and the reason they die hard is because this country has been such a magnificent success for so many hundreds and millions of people. for so many centuries. it really has and americans are resilient people. they are innovative people. they are hard working people. but the problem i think we have now, john, is we are no longer the producers we once were. we are consumers. we used to be a family centered society. we are now a self-centered society. consumerism takes up 70% of everything we produce. we don't save like other countries did. it's the character of the nation and character of the regime, if you will, the governmen

when it doubt, the regulation goes to the federal reserve. i think the ten member systemic risk council is huge. in that for the first time you actually have government being able to say that we are out there being able to identify systemic risk. and in theory and hopefully in practice, they could take apart a firm that endangered the entire system. >> brown: now chrystia freeland, the key question is what this does to change the behavior of wall street. and what do you see in terms of imposing change and where might it fall short. what do you see? >> well, i agree with roben that those are some of the key points. the other points that i would really single out are as your report mentioned, i think the derivatives rulings are really, really important. the fact that derivatives, now most of them have to be exchange-traded and they have to be centrally cleared this was the part of the market that really blew up. and what was so scary about it with hindsight was people really didn't know what was going on there. that is what we refer to when we