House Republicans propose Fed reforms, set hearing

WASHINGTON Mon Jul 7, 2014 6:32pm EDT

A general view of the U.S. Federal Reserve building as the morning sky breaks over Washington, July 31, 2013.  REUTERS/Jonathan Ernst

A general view of the U.S. Federal Reserve building as the morning sky breaks over Washington, July 31, 2013.

Credit: Reuters/Jonathan Ernst

WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives on Monday introduced a bill that would require the Federal Reserve to disclose more information, and set a hearing to discuss reform at the U.S. central bank.

The title of the hearing is "Legislation to Reform the Federal Reserve on Its 100-year Anniversary," according to an announcement by the U.S. House Financial Services Committee. The hearing was set for Thursday, 10:00 am EST.

The notice did not mention any specific legislation, but a memo sent later by committee staffers said two Republican congressmen have introduced H.R. 5018, known as the Federal Reserve Accountability and Transparency Act.

The bill, sponsored by Representatives Bill Huizenga of Michigan and Scott Garrett of New Jersey, would require the Fed to conduct cost-benefit analysis when adopting new rules and require transparency for Fed stress tests on banks and on international regulations. The bill also would require the Fed to disclose the salaries of highly paid employees, according to the memo, which was obtained by Reuters.

House staffers said the bill will be discussed at the hearing on Thursday.

The memo said the hearing would include economics professors John Taylor of Stanford, Simon Johnson of the Massachusetts Institute of Technology along with Mark Calabria of the Cato Institute and Hester Peirce, of George Mason University.

Committee Chairman Jeb Hensarling has pledged to demand more transparency from the Fed.

Some politicians have criticized the central bank for its aggressive actions after the financial crisis to lower unemployment and stimulate the economy using unconventional tools such as a monthly bond-buying program and building a balance sheet that now exceeds $4.5 trillion.

A Federal Reserve Spokeswoman declined to comment on the upcoming hearing.

Republican lawmakers have grown more critical of the Fed and the powers granted to it under the 2010 Dodd-Frank financial reform law that was passed in response to the U.S. financial crisis of 2007-09.

Congressman Scott Garrett, a New Jersey Republican, introduced legislation this year that takes aim at the Financial Stability Oversight Council (FSOC), created under Dodd-Frank to monitor emerging systemic risks. The council comprises heads of the top financial regulators including the Federal Reserve, and is chaired by Treasury Secretary Jack Lew. The group can impose additional regulations on any financial firms large enough that their failure could destabilize the economy.

Garrett's bill contains a number of measures to make the council more transparent.

Prior attempts to rein in the Fed include a 2012 proposal to subject the central bank to audits, which sailed through the U.S. House of Representatives. The legislation, written by Republican representative Ron Paul, whose anti-Fed crusade prompted a presidential bid and his grass-roots folk-hero status, was re-introduced last year.

Texas Congressman Kevin Brady is also sponsoring a bill that aims to strip the Fed of its low unemployment mandate, among other measures.

(Reporting by Michael Flaherty; Additional reporting by David Lawder; Editing by James Dalgleish and David Gregorio)

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Comments (5)
Burns0011 wrote:
This act might as well be labeled the “Bank Cheaters and Bribery Aid Act.” Because on the one hand, it forces the Federal Reserve to disclose how it measures how close a bank is to collapsing, which allows the banks to game the system and cheat, and on the other hand it forces the Federal Reserve to disclose how much its top people earn, which allows the banks to ‘bribe’ away those top people with better offers.

Jul 07, 2014 5:56pm EDT  --  Report as abuse
SunnyDaySam wrote:
Does anybody think the GOP House will do anything for the Average American? yeah, me neither. they sure haven’t up ’till now. The Party of Nothing has Nothing.

Jul 07, 2014 6:44pm EDT  --  Report as abuse
DurtBagg wrote:
The bill, sponsored by Representatives Bill Huizenga of Michigan and Scott Garrett of New Jersey, would require the Fed to conduct cost-benefit analysis when adopting new rules and require transparency for Fed stress tests on banks and on international regulations. The bill also would require the Fed to disclose the salaries of highly paid employees, according to the memo, which was obtained by Reuters.

BOTH REPUBLICAN’TS — FED REFORM NOT BANKING REFORM.

REPUBLICANS WANT FEW REGULATIONS… for the rich, but more for the rest of us.

Harvard Law Review
Deregulation: A Major Cause of the Financial Crisis
The articles in this issue explore the importance of government regulation of business in protecting the health and welfare of the American people.

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Bush Appointee Christopher Cox admitted the credit crisis was due to deregulation.

“Republicans want smaller government for the same reason crooks want fewer cops.” – James Carville

Jul 07, 2014 7:29pm EDT  --  Report as abuse
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