WASHINGTON (Reuters) - The Federal Reserve began releasing quarterly financial results on Monday, in an effort to increase transparency at a time many Republicans are demanding more accountability from the U.S. central bank.
The Fed previously published financial statements annually. Its decision to report more frequently responds to demands for more openness and provides a reminder to taxpayers that it has been a significant source of income for the government.
Its release of unaudited first- and second-quarter results detailed a sharp rise to $46.447 billion in its payments to the Treasury, from $40.456 billion in the first six months of 2011.
“This enhancement to the (Fed) Board’s previous financial reporting procedures will provide greater transparency by communicating financial information on a more frequent basis and in greater detail,” the central bank said.
Republican White House hopeful Mitt Romney has sided with Tea Party conservatives in his party who want the Fed’s activities audited annually.
This request echoes a campaign led by Texas Representative Ron Paul, who fired up the party’s base with his unsuccessful bid for the Republican presidential nomination, and it has become part of Republicans’ 2012 election platform.
Romney is not bound to implement the platform and he has been vague about what his call for an audit might entail.
The Fed’s financial results are already audited every year, and its operations have been regularly reviewed by the Government Accountability Office, a congressional watchdog agency. But the Republican-controlled House of Representatives approved a bill last month that would expose monetary policy decisions to audit, if it became law.
Fed Chairman Ben Bernanke has said this would lead to a “nightmare scenario” of political interference that would tarnish the central bank’s independence, sapping the effectiveness of its policy and harming the economy.
The Fed has become a political football in an election year dominated by concerns over the economy and the government’s budget deficit. Many Republicans have criticized its efforts to prop up the economy through the purchase of $2.3 trillion in bonds as a reckless courtship of inflation and an enabler of government profligacy.
Officials at the Fed, who are debating whether more bond purchases are warranted, have defended their actions as needed to fulfill the central bank’s mission to seek stable prices alongside maximum employment. The Fed board’s website also carries a prominent link proclaiming that it is already audited.
Reporting by Alister Bull; Editing by Andrea Ricci, Leslie Gevirtz and Tim Ahmann