Fed Chairman Bernanke Now Under Political and Economic Fire; Bank of America, Merrill Lynch - The Need For More Transparency in the Fed (Video)

Federal Reserve Chairman Ben Bernanke has told Congress that he didn't pressure Bank of America into acquiring Merrill Lynch in a deal that ultimately cost taxpayers $20 billion.



Rep. Bachmann appears with Rep. Jackie Speier (CA) and Rep. Brad Sherman (CA) on CNBC to discuss the need for increased transparency in the Federal Reserve, as well as the accusations that Fed. Chairman Ben Bernanke strong-armed the Bank of America into buying Merrill Lynch.



Newsmax reports:

WASHINGTON -- If 2008 was a tough year for Federal Reserve Chairman Ben Bernanke, 2009 is looking no easier as political battles pile on top of tough economic challenges.


With the end of his term looming in January, Bernanke's skill in avoiding pitfalls on both fronts will influence whether he wins another four years at the helm of the Fed.


First, there's the economy: with the U.S. unemployment rate at 9.4 percent and rising, Bernanke faces the challenge of fostering a recovery from an 18-month-old recession with unconventional policies that some worry will ignite inflation.


Then, there's politics: he must convince Congress the Fed deserves a leading role in a restructured financial oversight system even as he addresses criticism of Fed failings before the financial collapse and some actions since.


The political heat was in evidence on Wednesday as a Republican lawmaker charged that the Fed inappropriately threatened to fire Bank of America's chief, Kenneth Lewis, if he balked at going forward with a planned purchase of wounded brokerage Merrill Lynch late last year.


Bernanke is to testify on his behind-the-scenes role in the merger before the House of Representatives Oversight and Government Reform Committee on Thursday. It was the top Republican on the panel, Representative Darrell Issa of California, who accused the Fed of a "cover-up."


It is against these crosscurrents that President Barack Obama will need to decide whether to reappoint Bernanke when his term as chairman expires on January 31. Bernanke's main rival, White House National Economic Council Director Lawrence Summers, who is a former Treasury secretary, will advise Obama on that move.


"He is fighting fires that he does not want to fight, that are way out of his usual domain. I'm sure he'd rather just worry about the fed funds rate," said Torsten Slok, an economist with Deutsche Bank Securities in New York.