Who will police the regulators

It all started with Congressman Ron Paul attaching an oversight and audit amendment to HR 3996. This is on the top of HR 1207.

It seems that the FED is scared!! The Fed chairman writes an Op-Ed in Washington post, where he stated..

And a House committee recently voted to repeal a 1978 provision that was intended to protect monetary policy from short-term political influence. These measures are very much out of step with the global consensus on the appropriate role of central banks, and they would seriously impair the prospects for economic and financial stability in the United States. The Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation.

First lets restrain ourselves of the statement, "The Fed played a major part in arresting the crisis ...". However he states that "repeal short term political influence." The bill only expands GAO oversight. Perhaps he is scared of that! And he does not want to explicitly say that!

Then later he writes...

Congress, through the Government Accountability Office, can and does audit all parts of our operations except for the monetary policy deliberations and actions covered by the 1978 exemption. The general repeal of that exemption would serve only to increase the perceived influence of Congress on monetary policy decisions, which would undermine the confidence the public and the markets have in the Fed to act in the long-term economic interest of the nation.

So what are the "great 1978 exemptions"? The House document is here. But the real part of the "exceptions" are...

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;

(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, open market operations;

(3) transactions made under the direction of the Federal Open Market Committee; or

(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items.

Now the (2) is made to 180 days and the rest are made open.

As it should be,....

P.S.
Latest news! Ben has problems being reappointed and the Senate is "deliberating" :-)