WASHINGTON — Though the role of the Federal Reserve Board is among the most contentious provisions of the Obama administration's prescription for regulatory reform, the central bank was the only regulator absent from Wednesday's hearing in the House.
As the heads of the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency took their seats in front of the House Financial Services Committee, the Fed's policymaking panel was preparing to announce its latest decision on interest rates.
A spokesman for the House committee said Fed Chairman Ben Bernanke did not attend because of the schedule conflict, but noted that the central bank chief asked to appear before the panel in the future and "we have accommodated his request."
Bernanke is scheduled to testify Oct. 1.
The central bank had little to add, and observers questioned the impact the Fed's absence would have on the debate over establishing it as the systemic risk regulator.
"They could have sent someone," said Bert Ely, an independent consultant in Alexandria, Va. "There's a lot of pulling and tugging going on. They've got to be in there defending themselves."
A central tenet of the administration's financial overhaul, which President Obama reiterated in a speech last week, calls on Congress to establish the Fed as a systemic risk regulator. The White House envisions the Fed working with a council made up of the other banking regulators, but critics have charged that the panel is too weak, and key lawmakers including Senate Banking Committee Chairman Chris Dodd are reluctant to give the central bank so much power.
Given that dynamic, some said the Fed might have been well served by not showing up at Wednesday's hearing.
"The Fed's presence would probably put them at greater risk of losing at this kind of debate," said Joseph Mason, a professor at Louisiana State University. "Now nobody can ask them tough questions like 'Suppose you get this power. What would you do with it?' "
"In contrast," he said, "it places the other regulatory agencies on the hot seat."
Of course, the Fed's views on regulatory reform are well known by this point. It has strongly argued the case for broader supervision of risks that could take down the financial system, but has carefully stopped short of saying the Fed must be the agency to carry out that oversight.
Bernanke has also taken on a more public role amid the debate, appearing on CBS' "60 Minutes" and in a town hall forum aired on PBS. And that does not include the nine appearances the Fed chief has made before Congress so far this year.