The fight by financial reformers to hold the secretive Federal Reserve accountable for its role in allowing Wall Street and big banks to spiral out of control – and then keeping secret how it bailed them out – faces its first major test today. The House Financial Services Committee will consider two competing amendments on auditing the Fed.
They can’t come too soon. Earlier this week, for instance, Citizens for Ethics and Responsibility in Washington (CREW) even filed a lawsuit over the Fed’s continuing refusal to disclose the financial institutions that have received federal funds in the last six months – and the terms, if any, of federal assistance.
One audit proposal offered by Reps. Ron Paul and Alan Grayson has garnered the backing of the leading reform coalition, the 200-group Americans for Financial Reform and over 300 House co-sponsors for an earlier version. The amendment by the libertarian Republican Ron Paul and Rep. Grayson demands unprecedented auditing of the Fed’s actions and public exposure of which financial institutions get its money. As Heather Booth, the director of Americans for Financial Reform, puts it, “We need an audit of the Fed to examine what was the mismanagement of the economy before the meltdown, to look at the role of Chairman Benrnanke – and to see who has gotten what from the Fed and what they’re doing with it.”