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Although the president and his economic advisers came to the conclusion that the Fed was the agency best equipped to police large and interconnected firms operating in far-flung global financial markets, not everyone agreed, and opposition to the expanded role for the Fed was fierce in some quarters.
"There's not a lot of confidence in the Fed at this point" after controversies surrounding the Fed's $182 billion bailout of American International Group Inc., said Sen. Christopher J. Dodd, Connecticut Democrat and chairman of the Senate Banking, Housing and Urban Affairs Committee, which must approve most of the changes proposed by the president.
Sen. Richard C. Shelby of Alabama, the committee's ranking Republican, said the Fed had "utterly failed" as a regulator and that putting it in charge of regulating systemic risk would be piling on too many responsibilities.
Analysts from the far left and the far right were even more critical, though banking and Wall Street analysts said the Fed was the most logical choice because of its extensive experience fighting international financial crises.