Fischer Worries Fed Can't Head Off or Contain Financial Crises

fischerFederal Reserve Vice Chairman Stanley Fischer sounds concerned that the central bank may lack some key tools needed both to prevent another financial crisis and to contain the fallout should one occur.

He told the American Economic Association on Sunday that the Fed is not as well-equipped with regulatory powers to rein in housing and other asset bubbles as some other central banks. And he questioned whether Congress had gone too far in limiting the Fed’s ability to intervene if a crisis erupted and threatened the financial system.

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“We won’t know until it’s very late” whether the Fed has been constrained too much, Fischer said at the AEA’s annual meeting in San Francisco. That’s something “we have to worry about a great deal.” read more…

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