WASHINGTON, March 29, 2008 (AFP) – President George W. Bush’s administration will propose sweeping new oversight powers for the Federal Reserve in a bid to avoid calamities like the current subprime crisis, The New York Times reported Saturday. Citing a summary of the plan provided by the administration, the newspaper said the Fed will gain the power to investigate any activities of financial institutions that threaten US economic stability, gather information and combat risks to the financial system as a whole.
The plan will be proposed on Monday, the paper said.
The Securities and Exchange Commission would lose some of its authority and is likely to be combined with the Commodity Futures Trading Commission that regulates trade in gas, oil and other goods, the report said.
The report came as new statistics showed US consumer spending stalled in February despite rising incomes as Americans boosted savings amid recession fears.
A Commerce Department report showed a meager 0.1 rise in spending, the driver of growth in the world’s biggest economy. The figure was the weakest since September 2006 and matched analysts’ consensus forecast.
The proposal is due to be unveiled by the Treasury Department.
It is part of a sweeping