Sen. Shaheen says Federal Reserve needs to be audited

May 14, 2010

DOVER - U.S. Sen. Jeanne Shaheen says the Federal Reserve needs to be audited because the institution has been operating in the shadows for too long.

"Taxpayers have a right to know how their money is being spent," Shaheen said in a statement after the Senate voted for the measure 96-0 Tuesday. "The Federal Reserve has not been forthcoming about which big banks they have helped out. This is unacceptable, and this amendment will help provide the transparency and accountability the American people deserve."

Shaheen, who cosponsored the measure, said the audit will be included in Wall Street reform legislation and require the Fed to identify amounts that banks, financial institutions and foreign central banks that are receiving or have received emergency financial assistance from the Fed. The information needs to be posted on the Fed's website by Dec. 1.

The Associated Press reported the Fed's short-term lending, designed to increase the liquidity of banks reeling from the crisis, grew dramatically at the height of the 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.

The measure authorizes the Government Accountability Office to conduct a one-time audit of all emergency actions taken by the Fed since Dec. 1, 2007, including its mortgage-backed securities program, foreign currency liquidity swap lines and all other emergency programs, according to Shaheen's office.

Obama administration and Fed Chairman Ben Bernanke had resisted a broader effort.

By:  Adam D. Krauss
Source: Foster's Daily Democrat