BERNANKE REAPPOINTMENT DRAWS FIRE FROM SENATE

       President Obama's decision seen as a mistake by some

       Some US senators expressed worries or outright disgust on Tuesday at President Barack Obama's announcement that he was nominating Federal Reserve Chairman Ben Bernanke to a second term.
       Democratic Senator Christopher Dodd, the chairman of the Senate Banking Committee, cited "serious differences" with the Fed over the past few years, but added "reappointing Chairman Bernanke is probably the right choice".
       "Bernanke was too show to act during the early stages of the fore-closure crisis, but he ultimatelly demonstrated effective leadership and his reappointment sends the right signal to the markets," said Dodd.
       Dodd, who will chair Bernanke's Senate confirmation hearings, said he had "serious concerns" about the Fed's "failure to protect consumers" and vowed vigorous questioning on what authorities the central bank should have done.
       The top Republican on the panel, Senator Richard Shelby, said the hearings should include questions about the Fed's role in the US response to the global financial meltdown sparked by a collapse in the US housing market.
       The committee "should carefully examine the impact of the Fed's failures as a back regulator, how such failures contributed to the financial crisis, and whether Chairman Bernanke's performance as the chief regulator merits his reconfirmation", said Shelby.
       "We must be mindful that this crisis is not over. We must determine whether Chairman Bernanke has the strategic vision to chart the necessary course going forward and the resolve to stick to it," said Shelby.
       In his announcement, Obama said Bernanke's bold "out-of-the-box" thinking would help steer the US economy out of the worst slump since the 1930s.
       But independent Senator Bernie Sanders charged that Bernanke had been "asleep at the wheel" while the global economic meltdown developed and "did nothing to move our financial system onto safer grounds."
       Sanders, who sits on the Senate Budget Committee, accused the Fed chief of abetting "the greed, irresponsibility and illegal behaviour of Wall Street. We need a chairman of the Federal Reserve who is more concerned about expanding the productive economy, increasing decent-paying jobs for all Americans, than continuing to fan the flames of Wall Street greed and outrageous compensation "packages", the lawmaker said in a statement.
       And Republican Senator Jim Bunning accused Bernanke of helping Obama rather than being an independent central banker and bluntly declared: "I don't think he deserves another therm as chairman of the Federal Reserve."
       He accused Bernanke of "acting as an arm" of Obama's Treasury Department and supporting Obama's "out-of-control spending policies that have led to America's mounting debt and will put the taxpayers trillions of dollars more in the red".
       Bernanke "lacks the independent voice we need in a Federal Reserve chairman and has refused to provide any sort of transparency or account-ability to the American people when it comes to who exactly the Fed is lending to and how much they are lending", said Bunning.
       Bunning is a member of the Senate's committees on Finance as well as Banking, Housing and Uran Affairs.
       Bernanke's renomination allows him to redefine the Federal Reserve's mission as he expands its power over financial markets and pulls back on a credit surge the central bank used to keep the economy from collapse, economists say.
       His agenda during the next four years will include elevating the Fed's role in reducing excessive risk in major financial institutions, figuring out how to curtail asset bubbles, and scaling back US$1.2 trillion (Bt41 trillion) of monetary stimulus.
       "He will have the opportunity to permanently change the structure of the Federal Reserve system," said Vincent Reinhart, a former director of the Fed's Monetary Affairs Division who is now a resident scholar at the American Enterprise Institute, a Washington-based research group.
       The stakes are high, said Henry Kaufman, president of Henry Kaufman&Co in New York. "Success in overhauling supervision of the financial system would mean improved economic conditions for an extended period of time," Kaufman said. "Failure would mean a return to continued volatility."