Bernanke Empowered Bloomberg

The new financial regulation law gives the Federal Reserve chairman the authority to force banks to raise capital and tighten lending -- just as he’s trying to steer monetary policy in the opposite direction.

In November 2009, Senate Banking Committee Chairman Christopher Dodd advanced a radical proposal: to create a super-regulator that would take over most of the bank supervision that had been done by the Federal Reserve System, the Federal Deposit Insurance Corp. and other agencies.

Dodd had been a harsh critic of the Fed and its chairman, Ben S. Bernanke , declaring in July 2009 that the central bank’s supervision of financial services had been an “abysmal failure,” Bloomberg Markets magazine reports in its October 2010 issue.

In January 2010, the U.S. Senate approved Bernanke for a second four-year term by a tally of 70 to 30 -- giving him the most negative votes any nominee had received since the chamber started confirming Fed chiefs in 1978.

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