Archive for the ‘Federal Reserve’ Category
The Federal Reserve Can Not Account For $9 Trillion In Off-Balance Sheet Transactions
Monday, May 11, 2009
The Federal Reserve Can Not Account For $9 Trillion In Off-Balance Sheet Transactions
Posted by Tyler Durden at 3:05 PM
As for the pittance of $9 trillion in Fed off-balance sheet transactions over the past 8 months, well, yeah, that’s also somewhere out there… Just don’t ask the Federal Reserve where.
Rep. Alan Grayson summarizes it best “I am shocked to find out that nobody at the Federal Reserve is keeping track of anything.”
(P.S. Zero Hedge uses the term “anyone” generically, with the presumption that the Fed’s Inspector General should traditionally receive most memos on memorandum items that deal with a dollar sign and +/- 12 zeros after it).
http://zerohedge.blogspot.com/2009/05/federal-reserve-can-not-account-for-9.html
Fed Beaten: Bill To Audit Federal Reserve Passes Key Hurdle
First Posted: 11-19-09 08:13 PM | Updated: 11-19-09 08:44 PM
In an unprecedented defeat for the Federal Reserve, an amendment to audit the multi-trillion dollar institution was approved by the House Finance Committee with an overwhelming and bipartisan 43-26 vote on Thursday afternoon despite harried last-minute lobbying from top Fed officials and the surprise opposition of Chairman Barney Frank (D-Mass.), who had previously been a supporter.
The measure, cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), authorizes the Government Accountability Office to conduct a wide-ranging audit of the Fed’s opaque deals with foreign central banks and major U.S. financial institutions. The Fed has never had a real audit in its history and little is known of what it does with the trillions of dollars at its disposal.
The amendment expressly blocks Congress from interfering with the independence of monetary policy decision-making, but opponents of the measure said that the political pressure would inevitably follow.
A desperate, last-minute attempt to thwart the move came in the form of an amendment championed by Rep. Mel Watt (D-N.C.) and described by its supporters as more reasonable. On Tuesday, however, the Huffington Post reported that, on a close reading, his amendment would in fact decrease transparency at the Fed by adding additional restrictions.
Backers of the Watt amendment pressed their case on Wednesday by sending a letter from a “political cross section of prominent economists” backing a measure like Watt’s. HuffPost reported, however, that those economists might well have be prominent, but they certainly aren’t a “political cross section.” Seven of the eight economists in question have extensive connections to the Fed — and half of them are currently on the Fed payroll. Those affiliations were not noted in the letter.
The playbook in Washington often goes like this: When a measure that threatens the establishment builds enough momentum that it must be dealt with, it is labeled as “unserious.” The Washington Post editorial board, true to the script, called Paul’s measure “an unserious answer to a serious question.”
And it particularly rankles the center that a pair of “wingnuts” are behind a successful effort to challenge the prevailing order.
Step Two is for a “serious” compromise to be offered. In this case, it was Watt’s amendment. But by the time the vote was called Thursday afternoon, committee members had seen through his measure, recognizing that it was not a compromise effort to bring real transparency to the Fed but an attempt to further shut the the doors.
“The Watt amendment will fully obliterate everything 1207″ — Paul’s measure — “is intended to do,” said Paul during Thursday’s debate.
For anyone remaining confused, the debate was further clarified by the central bank itself: Federal Reserve Vice Chair Don Cohn and General Counsel Scott Alvarez spent much of the day calling committee members, urging them to oppose the Paul-Grayson amendment in favor of Watt’s, a member of Congress who asked for confidentiality told HuffPost.
Paul’s opponents also placed a letter from former Fed chairmen Alan Greenspan and Paul Volcker on the seats of every committee member. Such a move is in violation of House rules and Grayson was able to have the letters removed.
As the day wore on and support held for the Paul-Grayson side, the Fed still could hope that both would pass. Watt’s amendment, which included additional restriction, would then trump Paul’s.
To counter that possibility, the Paul-Grayson side moved to fully replace Watt’s amendment with theirs, leaving only one amendment to vote on. The motion carried and the amendment passed in a landslide.
The GOP broadly backed the amendment, though Frank chided them for finding their love of Fed transparency only after they lost power, noting that Paul has been introducing some version of the measure since 1983.
Frank said he was opposing the Paul amendment because it could be perceived as influencing monetary policy, which can have inflationary pressure. “Perception is very important in monetary policy,” said Frank.
He urged a no vote, yet 15 Democrats bucked him, voting with Paul. Key to winning Democratic support was a letter posted early Thursday from labor leaders and progressive economists. The letter, organized by the liberal blog FireDogLake.com, called for a rejection of the Watt substitute and support for Paul.
Grayson was able to show Democratic colleagues that the liberal base was behind them.
“Today was Waterloo for Fed secrecy,” a victorious Grayson said afterwards.
Watch:
http://www.huffingtonpost.com/2009/11/19/fed-beaten-bill-to-audit_n_364546.html
Audit the Fed Amendment Passes 43-26!
Audit the Federal Reserve: HR 1207 and S 604
On Thursday, November 19, 2009, after several hours of heated debate, the Paul-Grayson “Audit the Fed” amendment passed 43-26 in the House Financial Services Committee. The amendment calls for a comprehensive audit of the Federal Reserve and replaces the opposing “placebo” amendment proposed by Mel Watt.
The Paul-Grayson initiative is an amendment to Barney Frank’s HR 3996, also known as the “Financial Stability Improvement Act of 2009″. The Committee was going to vote on that bill on November 19, but Barney Frank surprisingly postponed the vote until after the Thanksgiving recess.
Ron Paul sent out the following press release shortly after the amendment passed:
http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/
FOR IMMEDIATE RELEASE
Washington, D.C. – Congressman Ron Paul (TX-14) is pleased to announce that his and Congressman Grayson’s amendment based on HR 1207 has passed in the Financial Services Committee by a vote of 43-26 and will be included in major banking reform legislation.
The Paul/Grayson amendment:
- Removes the blanket restrictions on GAO audits of the Fed
- Allows audit of every item on the Fed’s balance sheet, all credit facilities, all securities purchase programs, etc.
- Retains limited audit exemption on unreleased transcripts and minutes
- Sets 180-day time lag before details of Fed’s market actions may be released
- States that nothing in the amendment shall be construed as interference in or dictation of monetary policy by Congress or the GAO
“While HR 3996, if passed, will grant sweeping new powers to the Federal Reserve, at least with this amendment attached, it won’t be acting in secret anymore. This is a major victory for Federal Reserve transparency and government accountability,” stated Congressman Paul.
How they voted (HR 1207 co-sponsors in bold):
| Democrats | |||
| MA-04 | Rep. Barney Frank | nay | |
| PA-11 | Rep. Paul E. Kanjorski | nay | |
| CA-35 | Rep. Maxine Waters | nay | |
| NY-14 | Rep. Carolyn B. Maloney | nay | |
| IL-04 | Rep. Luis V. Gutierrez | nay | |
| NY-12 | Rep. Nydia M. Velázquez | nay | |
| NC-12 | Rep. Melvin L. Watt | nay | |
| NY-05 | Rep. Gary L. Ackerman | nay | |
| CA-27 | Rep. Brad Sherman | aye | |
| NY-06 | Rep. Gregory W. Meeks | nay | |
| KS-03 | Rep. Dennis Moore | nay | |
| MA-08 | Rep. Michael E. Capuano | nay | |
| TX-15 | Rep. Rubén Hinojosa | aye | |
| MO-01 | Rep. William Lacy Clay | aye | |
| NY-04 | Rep. Carolyn McCarthy | nay | |
| CA-43 | Rep. Joe Baca | ||
| MA-09 | Rep. Stephen F. Lynch | nay | |
| CA-42 | Rep. Gary G. Miller | nay | |
| GA-13 | Rep. David Scott | aye | |
| TX-09 | Rep. Al Green | nay | |
| MO-05 | Rep. Emanuel Cleaver | nay | |
| IL-08 | Rep. Melissa L. Bean | nay | |
| WI-04 | Rep. Gwen Moore | nay | |
| NH-02 | Rep. Paul W. Hodes | aye | |
| MN-05 | Rep. Keith Ellison | nay | |
| FL-22 | Rep. Ron Klein | nay | |
| OH-06 | Rep. Charles Wilson | nay | |
| CO-07 | Rep. Ed Perlmutter | aye | |
| IN-02 | Rep. Joe Donnelly | nay | |
| IL-14 | Rep. Bill Foster | nay | |
| IN-07 | Rep. Andre Carson | nay | |
| CA-12 | Rep. Jackie Speier | aye | |
| MS-01 | Rep. Travis Childers | aye | |
| ID-01 | Rep. Walt Minnick | aye | |
| NJ-03 | Rep. John Adler | aye | |
| OH-15 | Rep. Mary Jo Kilroy | nay | |
| OH-01 | Rep. Steve Driehaus | aye | |
| FL-24 | Rep. Suzanne Kosmas | aye | |
| FL-08 | Rep. Alan Grayson | aye | |
| CT-04 | Rep. Jim Himes | nay | |
| MI-09 | Rep. Gary Peters | aye | |
| NY-25 | Rep. Dan Maffei | aye | |
| Republicans | |||
| AL-06 | Rep. Spencer Bachus | aye | |
| TX-19 | Rep. Randy Neugebauer | aye | |
| DE-01 | Rep. Michael N. Castle | aye | |
| NY-03 | Rep. Peter King | aye | |
| CA-40 | Rep. Edward R. Royce | aye | |
| OK-03 | Rep. Frank D. Lucas | aye | |
| TX-14 | Rep. Ron Paul (sponsor) | aye | |
| IL-16 | Rep. Donald A. Manzullo | aye | |
| NC-03 | Rep. Walter B. Jones | aye | |
| IL-13 | Rep. Judy Biggert | aye | |
| NC-13 | Rep. Brad Miller | ||
| WV-02 | Rep. Shelley Moore Capito | aye | |
| TX-05 | Rep. Jeb Hensarling | aye | |
| NJ-05 | Rep. Scott Garrett | aye | |
| SC-03 | Rep. J. Gresham Barrett | aye | |
| PA-06 | Rep. Jim Gerlach | aye | |
| GA-06 | Rep. Tom Price | aye | |
| NC-10 | Rep. Patrick T. McHenry | aye | |
| CA-48 | Rep. John Campbell | aye | |
| FL-12 | Rep. Adam Putnam | aye | |
| MN-06 | Rep. Michele Bachmann | aye | |
| TX-24 | Rep. Kenny Marchant | aye | |
| MI-11 | Rep. Thaddeus McCotter | aye | |
| CA-22 | Rep. Kevin McCarthy | aye | |
| FL-15 | Rep. Bill Posey | aye | |
| KS-02 | Rep. Lynn Jenkins | aye | |
| NY-26 | Rep. Christopher Lee | aye | |
| MN-03 | Rep. Erik Paulsen | aye | |
| NJ-07 | Rep. Leonard Lance | aye |
Why Audit The Federal Reserve?
Ron Paul’s legislation is aimed at pulling back the curtain from a secretive and unaccountable Federal Reserve. Congress and the American people have minimal, if any, oversight over trillions of dollars that the Fed controls.
With recent bailouts and spending decisions shining a spotlight on the actions of the Federal Reserve, more and more pressure is bearing down on Congress to take action and demand accountability and transparency.
Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business.
Why Audit The Federal Reserve?
Why Audit The Federal Reserve?
Ron Paul’s legislation is aimed at pulling back the curtain from a secretive and unaccountable Federal Reserve. Congress and the American people have minimal, if any, oversight over trillions of dollars that the Fed controls.
With recent bailouts and spending decisions shining a spotlight on the actions of the Federal Reserve, more and more pressure is bearing down on Congress to take action and demand accountability and transparency.
Auditing the Fed is only the first step towards exposing this antiquated insider-run creature to the powerful forces of free-market competition. Once there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will have to become honest and transparent if it wants to remain in business.
http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/
HR 1207
This is the bill itself, H.R. 1207:
111th Congress – 1st Session
To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.H.R. 1207
A BILL
1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
(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.
(b) AUDIT. – Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:
“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. -
“(1) IN GENERAL. – The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.
“(2) REPORT -
“(A) REQUIRED. – A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.
“(B) CONTENTS. – The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.
Senate Bill Federal Reserve Download PDF
Financial Reform Federal Reserve Bill
http://banking.senate.gov/public/_files/AYO09D44_xml.pdf
Financial Reform Federal Reserve Bill Discussion Draft
http://banking.senate.gov/public/_files/FinancialReformDiscussionDraft111009.pdf
Rein in Wall Street, End Too Big to Fail, Prevent Another Financial Crisis
The failures that led to this crisis require bold action. We must restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them. We must create a sound foundation to grow the economy and create jobs.
U.S. Senate Democrats move to curb Federal Reserve’s powers!
U.S. Senate Democrats move to curb Federal Reserve’s powers
Senate Democrats move to curb Fed’s powers
By ANNE FLAHERTY, Associated Press Writer Anne Flaherty, Associated Press Writer – Tue Nov 10, 5:17 pm ET
WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.
The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year’s crisis.
“We saw over the last number of years when (the Fed) took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure,” said Dodd, a Connecticut Democrat.
Dodd’s proposal prompted cheers from consumer advocates and other Democrats, including Sen. Mark Warner, D-Va., an influential moderate who said swift action was necessary to prevent future government bailouts of big banks.
“Never again should the American taxpayers have to hear about ‘too big to fail,’ where the American taxpayer has to pick up the slack,” Warner said.
But the financial industry quickly pushed back.
The bill “would produce conflicts among regulators, undermine the state-chartered banking system and impose extensive new regulatory burdens on those banks that had nothing to do with creating the financial crisis,” said Edward Yingling, president of the American Bankers Association.
While Republicans were expected to oppose much of the bill, Sen. Bob Corker, a Tennessee Republican on Dodd’s committee, issued a statement setting an optimistic tone.
“I’m more hopeful than I was a few weeks ago that we will be able to come up with a bipartisan bill,” said Corker, who has worked closely with Warner on banking issues.
Among the top points of contention is Dodd’s desire to create a Consumer Financial Protection Agency to protect consumers taking out home loans or using credit cards against predatory lending and surprise interest rate hikes.
Republicans and industry officials say that creating another bureaucracy will make it harder for banks to do business and would limit the availability of credit.
Other provisions in Dodd’s bill would:
• Consolidate federal supervision of banks under a “Financial Institutions Regulatory Administration.”
• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.
• Create an “Agency for Financial Stability” that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.
• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.
• Impose new rules on investment rating agencies.
• Limit the Fed’s ability to provide emergency loans to mostly healthy institutions, instead of failing firms.
The Senate Banking Committee was expected to take up the legislation next week and vote by early December. Dodd said he expects to need Republican support to get the bill through Congress and that he remains optimistic consensus could be reached.
The bill will also have to be reconciled with the House version. Rep. Barney Frank, chairman of the House Financial Services Committee, said he expects a floor vote in December on his proposal.
Like Dodd, Frank wants to strip the Fed of its consumer protection powers and create a separate agency dedicated to the mission. Both House and Senate bills also would limit the Fed’s ability to provide emergency loans and create a council of regulators to monitor the risks posed by large financial firms.
But the House bill wouldn’t consolidate federal banking supervision and would ultimately put the Fed in charge of enforcing new requirements for large and influential firms.
Frank said Dodd’s announcement on Tuesday confirmed that “we are moving in the same direction” and will enact legislation soon.
http://www.timesrepublican.com/page/content.detail/id/520821.html
