–Maverick Senator Says Amendment Seeks ‘Transparency’ At Fed
–Never His ‘Intent’ To Dictate Monetary Policy
–One-Time Audit To Examine Fed’s Role Since 2007
–GAO Study Would Be ‘Unprecedented, Historic’ Probe

By John Shaw

WASHINGTON (MNI) – Sen. Bernie Sanders, an independent from
Vermont, said Friday that he is pushing for a vote Tuesday morning in
the Senate on an amendment that would require an expanded audit of the
Federal Reserve Board.

At a briefing, Sanders said his amendment would launch a
“comprehensive, one time” audit by the GAO of the central bank.

Sanders said the GAO study would represent an “unprecedented,
historic opportunity” to examine the Fed’s policies during a critical
period in which it created a raft of new programs to deal with the
exploding financial crisis.

Sanders’ amendment charges the GAO to conduct an audit of all of
the Fed’s emergency lending activities since December, 2007. Sanders
said it is important to better understand the Fed’s “hugely expanded
role” since 2007 and to examine possible conflicts of interest.

Sanders said his amendment would require the Fed to put on its
website all of the recipients of emergency assistance since December of
2007. The Fed would have to disclose how much money went to borrowers,
the dates the assistance was offered, the terms of repayment and the
“specific rationale” for the creation of the lending programs.

The amendment explicitly bans the GAO from reviewing the Fed’s
monetary policy, as well as its transactions with other central banks.

Sanders said it was “never my intention” to delve into, nor dictate
the future of, the central bank’s conduct of monetary policy.

“The American people are demanding transparency from the Fed,”
Sanders said.

“The American people need transparency,” he added.

Sanders said that Senate Banking Committee Chairman Chris Dodd is
supportive of his amendment and he believes the Obama administration is
comfortable with it as well.

But he said he is expecting the Fed to remain “vigorously in
opposition” to the expanded audit.

The Senate will resume debating a sweeping financial regulatory
bill Monday, but no votes are expected until Tuesday.

Sanders said he expects his amendment will need 60 votes to pass
because some opponents would be willing to filibuster it.

The underlying Senate bill, largely drafted by Dodd, establishes a
new independent Consumer Protection Bureau at the Federal Reserve Board,
creates a process to liquidate failed financial firms, sets up a council
of regulators to oversee systemic risk in the economy, establishes a
regulatory structure for over-the-counter derivatives, requires hedge
funds that manage over $100 million to register with the SEC and creates
a new office within Treasury to monitor the insurance industry.

Dodd’s bill has been merged with a package that was approved by the
Senate Agriculture Committee which requires OTC markets to adopt aspects
of the regulated markets such as mandatory clearing through derivatives
clearing organizations and trading on exchanges or exchange-like
facilities.

It has a narrow exemption for commercial “end users” who use
derivatives to hedge against economic contingencies such as fluctuations
in fuel prices, currency and interest rates.

Dodd has said that senators are continuing to “work on” language
related to derivatives, suggesting the current provisions are likely to
be amended.

** Market News International Washington Bureau: (202) 371-2121 **

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