Business in brief: Bernanke defends the Fed’s powers

Washington – Federal Reserve Chairman Ben Bernanke on Thursday defended the central bank’s record and argued for preserving its regulatory powers, but lawmakers in both parties criticized him and the Fed for lapses that contributed to the financial crisis.

Bernanke is expected to win a second term as chairman, but the confirmation hearing before the Senate Banking Committee provided new evidence of the resentment in Congress over what is seen as the Fed’s failure to tighten credit and curb financial risk-taking in time to avert the worst economic downturn since the 1930s.

During four hours of sometimes-tense questioning and rebuttals, Bernanke acknowledged that the Fed was slow to exercise its authority to clamp down on banks that were taking excessive risks and to protect consumers from predatory lenders.

But he insisted that, after he moved up to the chairmanship from membership on the board of governors, the central bank took steps to strengthen its regulatory role.

Los Angeles Times

Spokane promo angers merchants

Missoula – An e-mail from the Missoula Chamber of Commerce promoting a shopping trip to Spokane has some local business owners angry.

The e-mail sent to chamber members featured an advertisement from the Holiday Inn Express in Spokane promoting a shopping spree here. Missoula Business Improvement District Director Rod Austin said that in this economy local businesses need all the help they can get.

Chamber President Kim Latrielle said the Spokane hotel is a member of the local chamber, and membership allows it to send an e-mail to all chamber members. Associated Press

Auto firms may yield on dealer closings

Washington – General Motors Co. and Chrysler will reconsider decisions to close thousands of dealerships as part of a compromise meant to stave off federal legislation that would require them to keep the showrooms open.

The decision by the two automakers, announced Thursday, raises the prospect of new life for some of the more than 3,000 dealerships that were slated to close as part of the broad auto industry restructuring. Dealers have loudly protested the decisions, and some said Thursday that the policy is merely an attempt by the automakers to placate Congress.

Just how many dealers could potentially be allowed to stay open remains unclear. The companies did not provide any estimates. Dealers involved in talks with the automakers said likely only a handful of lots targeted for closure would survive, despite the new policy.

Associated Press