Audit The Federal Reserve Bill Passes House

By Cornelius Nunev


A small, but growing, number of individuals are not thrilled with the workings or indeed existence of the Fed. The nation's central bank does, after all, set monetary policy and figure out the expenses of extending credit for banks. However, a bill that would authorize Congress to audit the Fed has just approved the House of Representatives.

Get audit getting support

The Federal reserve, since its creation in 1913, has held sway in ways that many don't realize impact daily life. It is the nation's central bank, and controls the nation's cash supply, inflation rates and, through that, the expenses of lending money. In short, how much a dollar is worth and the way costly it is for banks to lend mortgages, installment loans and so forth, is part of what the Federal reserve controls, among other things.

The Federal reserve is also one of the many "independent government agencies." In other words, it's a private company that is part of the government. Some think not enough information is made publicly available by the Federal reserve about its dealings, which has led to many legislators and citizens calling for a bill that would audit the Fed, or rather force the bureau to open its books completely to scrutiny.

Getting house authorization

More government agencies might have to start showing their finances to the public soon since the House of Representatives just approved the bill 327 to 98. The bill would require the Fed to open its books specifically. The Federal reserve has been criticized by Representative Ron Paul of Texas who might have been anticipated to do it since he has not supported the law for a while now.

The basic idea of the bill would allow more access to Federal reserve policy decisions. Right now, records from meetings where the Fed decides to adjust the inflation rate on currency take three weeks to be released and five years for the transcript to come out. The bureau publishes its balance sheet every week online too. CNN points out that Deloitte and Touche just did an internal audit. The audits are done annually. The idea of the bill is for more immediate access though.

Issue with audit

Congress might end up controlling the Fed if the new Audit the Fed law is passed; Federal reserve Chairman Ben Bernanke is worried about, according to Bloomberg. This may cause a ton of corruption and manipulation of the Fed, which is an enormous concern for Bernanke. He has no issue with more transparency in finances though.

It is not that likely that the bill will become law, Representative Barney Frank said about the law, according to Bloomberg.




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