From the Washington AP today,
“The Senate voted unanimously Tuesday to authorize an examination of the Federal Reserve’s closely guarded emergency lending to financial institutions in the months surrounding the 2008 financial crisis.
The measure passed 96-0 as an amendment to a comprehensive financial regulation bill before the Senate. The vote came as the Fed ramped up its emergency program to keep a European debt crisis from spreading further.
The Senate proposal would require a one-time audit by Congress’ investigative arm, the Government Accountability Office, and cover a period beginning in December 2007. The GAO was specifically directed to examine potential conflicts of interest between the Fed and the banks receiving assistance.
The Fed’s short-term lending, designed to increase the liquidity of banks reeling from the crisis, grew dramatically at the height of Wall Street meltdown. At its peak at the end of 2008, the Fed’s lending totaled $1.16 trillion. Overall, the Fed’s balance sheet ballooned to $2.3 trillion, more than double where it stood before the crisis struck
Momentum for a more transparent Fed grew last week after its lead sponsor, Sen. Bernard Sanders, I-Vt., reduced the scope of the audit, and the Obama administration and Fed Chairman Ben Bernanke withdrew their earlier opposition. A proposal for a broader audit failed 62-37 Tuesday.”
For 30 years, Congressman Ron Paul has made the bank, cloaked in secrecy, his mission. To bring this quasi-government institution into public sunlight and scrutiny through transparency and accountability. And, after the financial crisis of 2008, his unfailing effort resulted in an astonishing win in the passage of HR 1207, a bill that would for the first time in it’s creation audit the Federal Reserve Bank. The bill passed as an amendment both in the House Financial Services Committee and in the House itself.
The House version-HR 1207-is much stronger and both of these bills will probably die a slow death in committee during the reconciliation process, but this does not belittle the fact that a Senate bill has now passed unanimously and the House bill passed surprisingly to audit the Federal Reserve.