The New York Federal Reserve, widely considered to be the most powerful among the regional institutions in the central bank's system, may have its wings clipped by a growing movement in Congress, according to a report.
Politico reported on Saturday that two top House Republicans that sit on the banking committee are mulling proposals that would curb the New York Fed's authority over Wall Street and monetary policy. The idea, being pushed by former Dallas Fed president Richard Fisher, would revoke the New York Fed's permanent position as vice chair of the Federal Open Market Committee (FOMC)—the central bank's monetary policy making arm.
According to Fisher's proposal, the New York Fed chief would be a part of monetary policy decisions, yet wouldn't have an automatic vote, Politico reported. In addition, there should be a rotation among the regional Fed banks every two years, the report noted.