The U.S. House of Representatives’ Committee on Financial Services (“FSC”) held a hearing titled “Fed Oversight: Lack of Transparency and Accountability.” The hearing examined three aspects of the Federal Reserve from different perspectives: (i) “the lack of transparency and the opacity of internal processes at the Federal Reserve”; (ii) “[the] overreach by the Federal Reserve in expanding its authority and power beyond the authority granted to it under the Dodd-Frank Act”; and (iii) “the Federal Reserve’s refusal to comply with Congressional investigations and requests for information as well as the lack of legitimate basis for this non-compliance.”
The following witnesses testified:
- Testimony of Mark A. Calabria, Ph.D., Director of Financial Regulation Studies, Cato Institute (written testimony)
- Testimony of Paul H. Kupiec, Resident Scholar, American Enterprise Institute (written testimony)
- Testimony of Alice M. Rivlin, Senior Fellow in Economic Studies, Brooking Institution (written testimony)
- Testimony of John B. Taylor, Professor of Economics, Stanford University (written testimony)
Lofchie Comment: Two additional questions that might be usefully addressed: (i) the scope of the Federal Reserve’s expertise in securities and insurance activities over which it recently exercised substantial direct and indirect authority and (ii) the fit, or the potential lack of it, between the “banking culture” of the Federal Reserve, which tends to risk making aversion its primary objective, and the securities markets, which are meant to provide entrepreneurial capital and even accept the risk of failure.