US wants more transparency in banking system
2022.12.09 14:23
US wants more transparency in banking system
Budrigannews.com – Legislation authored by Democratic Senator Elizabeth Warren and Republican Senator Pat Toomey would make it simpler to obtain information from the 12 regional banks of the United States Federal Reserve.
In press releases issued on Friday, the two senators stated that their proposed law would, among other modifications, place the regional Fed banks under the Freedom of Information Act, or FOIA.
Even though the Board of Governors in Washington is in charge of the regional Fed banks, they are actually quasi-private businesses that are technically owned by private banks in the area. In addition to regulating local banks and providing services to financial institutions, the regional Fed banks also contribute to the formulation of monetary policy and, in the case of the New York Fed, carry it out. While the Board is, they are not currently officially subject to FOIA.
In a public statement, Sen. Warren’s office said the law would ensure the provincial Took care of banks are receptive to legislative requests. Both senators claim that the banks they have contacted have not responded to their requests for a variety of documents regarding ethics and other topics. They have been requesting these documents from the central bank for some time.
Additionally, the law would strengthen the central bank’s in-house watchdog, the Office of Inspector General, which is currently looking into the financial market trading of several retired and serving regional bank leaders. Even though critics like Better Markets have questioned the thoroughness of the investigation, the Inspector General cleared Fed leader Jerome Powell and his former second-in-command Richard Clarida of trading violations earlier this year.
More Cry of recession is coming from big banks around the world
The proposed law would make the investigations chief an appointment made by the president and subject to Senate confirmation instead of by the Fed leader. Additionally, the law would prohibit all government financial regulatory agencies from denying congressional requests for information pertaining to ethics.
The law “would strengthen congressional oversight of the Fed and other financial regulatory agencies,” according to Warren’s office.
A Fed spokesperson declined to discuss the legislation.
The legislation’s viability was questioned by at least one Fed observer. “We see this bill as unlikely to pass but it has enough bipartisan interest to attract ongoing attention,” Evercore ISI analyst Krishna Guha told clients.
