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The Shaheen-sponsored measure to audit of the Fed will increase transparency, accountability

(Washington, D.C.) - Today, an amendment to audit the Federal Reserve, which was cosponsored by U.S. Senator Jeanne Shaheen, was successfully adopted and will be included in the Wall Street Reform legislation currently before the Senate. The measure would also require the Federal Reserve to identify the banks, financial institutions, and foreign central banks that are currently receiving or have received emergency financial assistance from the Federal Reserve, as well as the dollar amounts and terms of these loans. All this information would then be required to be posted directly on the Federal Reserve's website. 

"Taxpayers have a right to know how their money is being spent," said Shaheen. "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."

The amendment requires the Government Accountability Office (GAO) to conduct a one-time audit of all emergency actions taken by the Federal Reserve since December 1, 2007, including the Federal Reserve's Mortgage Backed Securities Program, foreign currency liquidity swap lines, and all other emergency programs.

In order to provide American taxpayers with a full, transparent accounting of the Federal Reserve, the amendment would require the Federal Reserve to publish on its website, no later than December 1, 2010:

  • The names of all financial institutions, businesses, and foreign central banks that received emergency assistance from the Fed since December 1, 2007;
  • The type of financial assistance provided to that business, individual, entity, or foreign central bank;
  • The value or amount of that financial assistance;
  • The date on which the financial assistance was provided;
  • The specific terms of any repayment expected, including the repayment time period, interest charges, collateral, limitations on executive compensation or dividends, and other material terms; and
  • The specific rationale for each such facility or program.

This amendment is now part of the larger Wall Street reform legislation currently before the Senate for consideration.  A vote on the final bill, as amended, is expected to occur as early as the end of this week.