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View Full Version : FED: Bernanke Transparency Offer May Not Defuse Calls for Audits




bobbyw24
02-25-2010, 06:34 AM
By Scott Lanman, Craig Torres and Joshua Zumbrun


Feb. 25 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke sought to defuse congressional efforts to audit monetary policy by backing the release of more information on emergency aid to investment banks and corporations.

The Fed will support legislation to let government auditors probe six temporary programs created to combat the financial crisis such as the Primary Dealer Credit Facility, Bernanke said yesterday in House testimony. While he would support the delayed release of names of firms getting aid from those programs, he said banks borrowing through the longstanding discount window must be allowed to remain anonymous.

Bernanke’s move toward greater openness may not dissuade lawmakers who want the Fed to disclose more information about the Fed’s lending and policy decisions. Lawmakers are responding to public anger over the Fed’s role in the $182.3 billion bailout of American International Group Inc.

“You’ve certainly seen changes for more transparency in the past 18 months,” said Representative Scott Garrett, a New Jersey Republican. “But I still support the legislation and I think the majority of the House still does as well.”

Representative Ron Paul won House passage in December of broader audits than Bernanke advocates. House members “signed on to the bill because there has been a public outcry, and this has given them a chance to express themselves and identify with that position,” Paul said in an interview yesterday.

Bernanke yesterday offered “full transparency” on the emergency programs, including revealing the names of borrowers.

Lehman Collapse

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ab1qWaGNcEtY

TheEvilDetector
02-25-2010, 06:43 AM
Too little too late and only done as a last ditch attempt to stop an audit (not as expansive as Paul's original audit legislation HR 1207).

HR 1207 has been watered down in HR 4173 which saw passage in the house on the 11th of December 09 and has now been referred to the Senate.

Watered down HR 1207 is found in Section 1254 of HR 4173.

The relevant portions are as follows:

Original HR 1207
"...(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after `shall audit an agency' and inserting a period. ..."

The relevant section from the watered down version:
(Part of Section 1254 in HR 4173)

"...(2) in subsection (b), by striking all after `has consented in writing.' and inserting the following: `Audits of the Federal Reserve Board and Federal reserve banks shall not include unreleased transcripts or minutes of meetings of the Board of Governors or of the Federal Open Market Committee. To the extent that an audit deals with individual market actions, records related to such actions shall only be released by the Comptroller General after 180 days have elapsed following the effective date of such actions.'; ..."

References:

HR 1207 - Federal Reserve Transparency Act of 2009
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.1207:

HR 4173 - Wall Street Reform and Consumer Protection Act of 2009
http://thomas.loc.gov/cgi-bin/query/F?c111:3:./temp/~c111tYz5rl:e1012: