Frank working to give banks less control on the Federal Open Market Committee

Barney FrankOne of the authors of the Dodd-Frank Wall Street Reform and Consumer Protection Act is now going after Federal Reserve operations with a new piece of legislation.

Rep. Barney Frank (D-Mass.) introduced a bill on Thursday that would require the Senate to confirm all members of the Federal Open Market Committee, reports.

The FOMC, which consists of seven appointed Fed governors and five regional Federal Reserve Bank presidents, is responsible for setting interest rates.

Frank, along with other Democrats in Congress, is hoping to reduce the amount of power that the banking industry has on the FOMC.

Republicans have lashed out against Frank’s proposal.

“The end result of this bill would be to further politicize the conduct of monetary policy, which is the last thing our economy needs right now,” Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, said, according to

Financial experts agree that interest rates chosen by the Fed directly impact the amount of money commercial banks can lend. The danger to Frank’s bill, according to experts, is that it could lead to politicians who have agendas to attempt to influence monetary policy, specifically during an election year.

Fed Chairman Ben Bernanke has felt a lot of heat lately from politicians as the election cycle begins.. Sarah Palin has said that Bernanke should “cease and desist,” while Rick Perry has promised not to allow Bernanke another term if he is elected president, reports.

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