A small, but growing, number of people are not thrilled with the workings or indeed existence of the Federal reserve. The country’s central bank does, after all, set monetary policy and determine the expenses of extending credit for banks. However, a bill that would allow Congress to audit the Federal reserve has just approved the House of Representatives.

Auditing the Fed

The Fed, since its creation in 1913, has held sway in ways that many do not realize impact daily life. It is the country’s central bank, and controls the country’s money supply, inflation rates and, through that, the expenses of lending cash. In short, how much a dollar is worth and the way costly it is for banks to lend mortgages, installment loans and so forth, is part of what the Federal reserve controls, among other things.

A ton of legislators and citizens have asked that the Federal reserve be audited, which is why a new bill is being considered that would require the Fed to open its book up to the public. It is an „independent government agency“ technically meaning that it is part of the government but is a private business still.

House pleased with bill

The Federal reserve has been criticized by Ron Paul of Texas for a while, which is why he sponsored the bill which approved 327 to 98 in the House of Representatives. ABC points out that the House is ready for more government agencies to show their finances.

The bureau already has an internal audit performed each year, according to CNN. One of the most recent was by Deloitte and Touche, one of the „Big Four“ auditing firms. The agency also publishes its balance sheet online every week. However, the point is more to get instant access to Fed policy decisions, specifically monetary policy decisions. Records of those meetings, where the agency decides the inflation rate for American currency, take a bit longer to come out. It takes three weeks for meeting minutes to be released. The transcripts take five years.

Risk of federal manipulation

Federal reserve Chairman Ben Bernanke has often warned, according to Bloomberg, that an „audit the Fed“ law that goes too far will place the agency under direct Congressional control, which could possibly put the agency at risk of manipulation for political purposes. Part and parcel to the agency’s creation was that it remains separate of Congress, which is often as fickle as public opinion. He does, however, advocate for greater transparency.

Representative Barney Frank does not think the law will go anywhere, according to Bloomberg, and it will probably not become the law.

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