A 1978 statute excludes from GAO oversight the Fed’s monetary policy deliberations, loans to banks from its discount window and related activities to, in the words of a congressional report issued at the time, permit the Fed to “independently conduct the nation’s monetary policy.” A provision adopted by the committee Thursday would undo that. “We can assure you that this protection of internal deliberations in reaching decisions that will affect market conditions and could expose sensitive information about particular institutions is indispensible in the Federal Reserve’s conduct of monetary policy,” Greenspan and Volcker said.
Friday, November 20, 2009
The Federal Reserve and Its Deliberations
In chapter 18, we discuss the deliberations of the Federal Reserve. The House Financial Services Committee just voted for a measure to allow the Government Accountability Office to scrutinize these deliberations. Former Fed chairs Alan Greenspan and Paul Volcker wrote the committee to oppose the measure and express support for current law. The Wall Street Journal explains: