Bachus: Proper Oversight Of The Federal Reserve Is Essential To Financial Regulatory Reform
WASHINGTON,
November 20, 2009
- Congressman Spencer Bachus, the top Republican on the Financial Services Committee, made the following statement today during Committee consideration of an amendment offered by Rep. Ron Paul (R-TX) that would subject the Federal Reserve to audits by the Government Accountability Office (GAO): "Over the last year and a half, the Fed has used its authority under Section 13(3) to conduct market interventions which have doubled the size of its balance sheet to over $2 trillion. These interventions in virtually every corner of the American economy require greater disclosure if Congress is to perform effective oversight. The GAO audits this amendment requires would give taxpayers and market participants a better understanding of the reasoning behind Fed policies. Increased transparency should lead to better-informed decisions. "Some critics of a GAO audit of the Federal Reserve argue that enhanced oversight will limit the central bank's independence and its ability to properly conduct monetary policy. In fact, this amendment explicitly states that none of its provisions constitute interference in or dictation of monetary policy. Also, the amendment calls for an180-day time lag on publication of records related to specific market interventions to avoid destabilizing markets or stigmatizing individual firms.
"Mr. Chairman, proper oversight of the Federal Reserve is essential to financial regulatory reform and the U.S. economic recovery. The enhanced oversight required by the Paul amendment will be even more important if the underlying bill is successful in granting a large part of the authority to address financial instability to the Federal Reserve Board. "I again commend the gentleman from Texas for his work on this amendment and urge my colleagues to support it."
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