There are signs that the Obama administration and Congress are looking at taking their role in propping up the banking industry one step closer to nationalization. In particular, in his testimony in front of the Senate Budget Committee on Tuesday, Fed Chair Ben Bernanke, asked the Congress to put such a framework in place.
"I'd like to challenge the Congress to give us a framework where we can resolve multinational complicated financial conglomerate like Citigroup, like AIG, or others if that became necessary. We do not have that framework and therefore we must work within the constraints of what we have."
There has been a growing clamoring for the government to take over major banks that have been receiving government bailouts but are still teetering on collapse. Even Conservative Senator from South Carolina, Lindsey Graham, is taking up the issue.
While he has mentioned before he would consider nationalization, he reiterated the point during the Bernanke testimony.
Mentioning he had "parked his ideology" outside the Senate chambers, he said:
"When you look at amount of money we are putting into the banks and the amount of control we have over how much you get paid and what decisions you make we are pretty much running the damn thing...""...There may come a time, at least in my mind, where it would be better to take them over quickly and sell off the good parts and better manage the bad parts than it would be to continually capitalize. Does that make sense to you?"
Bernanke responded that indeed, it did, but "I reiterate that we do not have the tools to do that."
Calls to Graham's office were not immediately returned.
The above-quoted exchanges take place at minute 12:56 and 14:01
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