August 29, 2013 / 7:56 PM / in 4 years

Fed should strengthen controls for handling of minutes: watchdog

Aug 29 (Reuters) - The U.S. Federal Reserve should beef up its controls over the handling of minutes for its policy-setting meetings, after the market-sensitive documents were inadvertently released to a select group in April, the U.S. central bank’s watchdog said on Thursday.

Fed Chairman Ben Bernanke requested the watchdog review the Fed’s processes after a member of its staff emailed minutes of the U.S. central bank’s March policy meeting to over 100 congressional staffers and bank lobbyists on April 9, about 24 hours ahead of their scheduled release.

The Fed should limit access to the minutes to board staff who “have a need to know,” and remove any staff who do not, the Fed’s Office of Inspector General said in a report published on Thursday.

The OIG’s office also recommended the Fed have written policies and better training to safeguard confidential documents.

The Fed has begun to implement the OIG’s recommendations, it said in a letter attached to the watchdog’s report, including a requirement that emails regarding minutes contain only a brief note and a link to the Fed’s public website, rather than an attached document.

After discovering the breach early on April 10, the Fed decided to publish the minutes at 9 a.m. EDT (1400 GMT), or five hours ahead of the scheduled release time.

Among those who received the minutes early were people with email addresses that identified them as working for a number of financial firms, including Goldman Sachs, Barclays Capital, Wells Fargo & Co, Citigroup Inc, UBS and JPMorgan Chase & Co, which trade on new information about U.S. monetary policy.

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