Videos and transcript are at the bottom of the story.
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From the WSJ:
As the House and Senate move to finalize regulatory-overhaul legislation, the Federal Reserve has emerged as likely to retain most of the power and independence Fed officials have feared they might lose.
On Thursday, senators on a panel meant to reconcile competing versions of the bill voted 10-2 to kill a provision that would have made the president of the Federal Reserve Bank of New York a White House appointment. The position is now an internal Fed appointee. Fed officials said the change would have politicized the institution.
Lawmakers' efforts to remake the Fed comes amid popular angst directed toward the central bank for its failure to head off the financial crisis and for the dramatic corporate rescues it engineered.
A rethink of the Fed has been part of the broader financial overhaul legislation expected to be completed in Congress this month. The House-Senate conference also has resisted a House attempt—popular in Congress but adamantly opposed by the Fed—to subject the Fed's interest-rate decisions to regular audits by the Government Accountability Office, which Congress oversees.
In a tentative compromise, the GAO would gain limited authority to scrutinize the Fed's crisis decisions and the Fed would disclose, with a two-year lag, details of loans it makes to banks through its discount window. The Fed now does not disclose discount window loans.
Rep. Ron Paul (R., Texas), who championed wider audits, described the compromise that has been worked out as a partial victory for Fed critics like himself.
- "We will hopefully get more information than we were able to get before," he said in a telephone interview. But "the fact that the Fed is allowing this to get through means there could be some roadblocks for us ... there is no way the Fed is going to allow us to know exactly what they do."
The Fed earlier beat back proposals to strip it of authority to regulate small banks. Both House and Senate versions of the legislation establish the Fed as the key financial regulator.
Continue reading at the WSJ >>
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Video: Ron Paul demands a FULL audit of the Federal Reserve -- June 9, 2010
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Have you seen:
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Congressman Ron Paul speaks up during discussion on a motion to instruct conferees on HR 4173, the so-called "Wall Street Reform and Consumer Protection Act of 2009."
Text is below:
Mr. BACHUS. Mr. Speaker, I yield 4 minutes to another gentleman from Texas (Mr. Paul). (Mr. PAUL asked and was given permission to revise and extend his remarks.) Mr. PAUL. I thank the gentleman for yielding. Mr. Speaker, I rise in support of this motion to instruct. I think it is a good idea that we don't have the taxpayers bailing out eternally institutions that are bankrupt. But there is an important thing to remember, that when an economy gets out of kilter, the marketplace demands a correction of that. And that's usually called the recession. Of course, we are not discussing here today exactly how we get into the excesses, but we do. And, unfortunately, debt gets too high and mal-investment gets too excessive, and the market wants to correct this. Now, it's essential that this excessive debt be liquidated. It can be liquidated in two different ways. It can be written off by inflationary currency and paid off with bad money, or it can be liquidated actually through the bankruptcy process. So I am in strong support of this, but I also want to make a point here and a suggestion to the conferees that they pay attention to the provision in the House version of our bill dealing with the Federal Reserve. And that provision is called H.R. 1207, which deals with the auditing. And there is a difference between the Senate version and the House version. So, although we are not talking about that specifically, to me it's important, not only for the issue of oversight and transparency, but there is also an opportunity for the Federal Reserve to provide bailout provisions for certain organizations, as well. We are talking about taxpayers' funds, the appropriated funds, TARP funds and others. But when we come to extending loans, in a way this very much is a bailout. So I would like to suggest that we look at that and stand by the House provision. We do have 319 cosponsors of this provision. Mr. FRANK of Massachusetts. If the gentleman would yield, as you know, I was for some form of that. And I guarantee, because the Senate has acted, we will have tough auditing provisions of the Federal Reserve in the final bill. And I do want to note to my friend from Texas that, when the Republicans offered a motion to recommit to the bill, they would have wiped out a number of things, including his audit provision. So despite the fact that my friend from Texas temporarily abandoned his audit provision to the perils of a recommittal provision, I will join with him in reviving it. And, as he knows, we have in our bill a severe limitation on this power under section 13(3) for making these loans. What they did with AIG will no longer be possible. There will be no more loans to individual institutions. But he has been the leader on the audit situation, and I intend to continue to work with him to make sure it is well done. Mr. PAUL. I thank the chairman. And I would just like to reemphasize that it is the responsibility of the Congress to commit to oversight of the Federal Reserve, something that we have been derelict in doing. I think the mood of this House and the mood of the Senate and the mood of the country is more transparency and more oversight. The provision in the Senate version is not adequate for an audit of the Fed. So I am encouraged that we are getting more attention because, ultimately, it is necessary that we understand exactly how the business cycle comes about and how the Federal Reserve participates in this. Because, under the circumstances of today, on what we are doing, we are prolonging our agony. And someday I would hope to see that our recessions--and now we are talking about depressions--are minimized and shortened. And I am concerned that the programs that we are working with today are prolonging those changes. So the most important thing that we can do is make sure that we exert our responsibilities, have oversight of the Federal Reserve, commit to these audits of the Federal Reserve, and not to endorse the idea that the Federal Reserve is totally secret, can do what they want, can bail out other companies and banks and foreign governments and foreign central banks without fully knowing exactly what they are doing. Once again, I thank the chairman of the committee for his support for auditing the Fed.
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Video: Paul destroys Bernanke...
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Video: Ron Paul in House-Senate conference...
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