Chairman Bernanke delivered his semiannual monetary policy report to the Senate Banking Committee earlier today, answering questions on QE2, long-term deficit reduction, and other macroeconomic concerns. This report assesses key financial-regulatory issues raised at the hearing. Under questioning from Sen. Schumer (D-NY) about concentration limits under the Dodd-Frank Act (see FSM Report CONCENTRATION3), Chairman Bernanke responded that the provision could put U.S. banks at a competitive disadvantage. He said risk-retention rules (see FSM Report ABS17) will soon be out without providing specifics on them and did not engage in debate over the future of Fannie and Freddie.
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