Senate passes measure to increase oversight of the Fed

Senate lawmakers voted unanimously Tuesday to pass a measure that would increase oversight of the Federal Reserve, according to The Washington Post.

The measure, spearheaded by Sen. Bernard Sanders (I-Vt.), is an amendment to a broader financial overhaul package currently before the Senate and expands the Government Accountability Office's power, allowing it to audit the Fed. It also requires the Fed to disclose details about the firms that received emergency aid during the financial crisis.

"The American people have a right to know where their taxpayer money is going," Sanders said on the Senate floor.

Sanders' initial proposal would have required the Fed to submit to regular audits, but he narrowed the legislation's scope as a result of the Obama administration’s and lawmakers' concerns about maintaining the Fed's political independence. In fact, the new version also prevents investigation of the Fed's deliberations on setting interest rates and other elements of monetary policy.

Still, the Fed would have to undergo a one-time examination of its substantial emergency lending programs and post details on its website by December about the firms that benefited from lending during the economic crisis.

Date : 5/12/2010