More Ass Covering by the Fed

We are now getting whispers that the Federal Reserve is planning to get tough with the banks:

If the Fed chairman’s speech didn’t worry investors, his timing is interesting. Ben Bernanake now flies to Switzerland for a meeting with the world’s other central bankers.

Saturday’s invitation from the Bank of International Settlements specifically questions whether banks—using cheap money—are returning to the aggressive behavior that prevailed during the pre-crisis period.

What we will see is a lot of fake toughness, because Bernanke is trying to do everything that he can to kill the Fed audit bill.