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originally posted by: xuenchen
a reply to: Gryphon66
But where in the bill does it indicate all that?
She won't tell me any specifics and negatives.
Liz hasn't answered my email yet.
In 1978, Congress gave the Government Accountability Office greater access to federal bank regulatory agencies. However, the legislation carved out an exemption for the Fed, precluding the watchdog agency for Congress from auditing activities related to the Fed’s monetary policy, transactions with foreign central banks and Federal Open Market Committee operations.
In 1993, the GAO estimated that 90% of the Fed’s $368 billion balance sheet was not subject to GAO audits.
The central bank’s balance sheet, post-crisis, has ballooned to over $4.5 trillion.
The Fed has launched an all-out campaign against the measure, perhaps trying to kill it in its infancy.
"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.
originally posted by: Gryphon66
originally posted by: neo96
It's no secret why Warren opposes auditing the fed.
Her villain is Wall Streets, and the Bankers.
Not the thing that prints fiat money, and controls every financial instrument in this country.
Warren is as transparent as they come.
The Federal Reserve system is and has been audited. It is a non-issue.
In 1978, Congress gave the Government Accountability Office greater access to federal bank regulatory agencies. However, the legislation carved out an exemption for the Fed, precluding the watchdog agency for Congress from auditing activities related to the Fed’s monetary policy, transactions with foreign central banks and Federal Open Market Committee operations.
In 1993, the GAO estimated that 90% of the Fed’s $368 billion balance sheet was not subject to GAO audits.
The central bank’s balance sheet, post-crisis, has ballooned to over $4.5 trillion.
[T]he Federal Reserve System was created by the Federal Reserve Act of December 23, 1913, establishing a new central bank intended to serve as a formal "lender of last resort" to banks in times of liquidity crisis—panics where depositors tried to withdraw their money faster than a normal fractional-reserve-based bank could pay it out.
In July 2010 Congress passed the Dodd Frank Wall Street Reform and Consumer Protection Act. Section 1102 of the act provided GAO with the authority to audit the Federal Reserve Board or Banks' operations and procedures with respect to a credit facility or certain open market transactions...
by Sen. Rand Paul (R-KY) 10 Feb 2015
If the Federal Reserve was a real bank, without extraordinary powers, it would be insolvent.
The Fed has $4.5 trillion in liabilities and only 57 billion dollars in equity. It is leveraged at 80:1, nearly three times greater than Lehman Brothers when it failed.
Nearly 40 percent of the Fed’s liabilities are said to be mortgage-backed securities – the question needs to be: How many are distressed home loans?
What does that mean? It means the dollar that was once as good as gold ultimately became backed by the full faith and credit of the U.S. government. And since the panic of 2008, your dollar is now backed by bad home loans, bad car loans, and derivatives.
Is anyone comforted?
Over the past one hundred years the dollar has lost 96 percent of its value.
If the Fed were forced to do, what every ordinary bank must do—take its “assets” and mark them to their current market value—many believe the Fed would be insolvent.
So, after the banking crisis of 2008, we got alarmed and we passed regulations. The only problem is, we passed regulations on the banks that weren’t involved and gave more power to the bank that was involved—the Fed.
No bank in Kentucky failed during this crisis, yet Dodd-Frank pummeled our small community banks with crippling regulations.
What we really needed was more oversight of the Fed, not small community banks.
If the Fed has purchased more than $2 trillion dollars of “distressed” assets, don’t taxpayers deserve to know what they bought?
Did they buy the assets of friends and acquaintances?
Did they buy any liabilities from companies they used to work for?
Maybe someone should ask about the revolving door from Wall Street to the Treasury to the Fed and back again. Are there any conflicts of interests?
Sen. Bernie Sanders (I-VT) and I don’t agree on much, but I thought he did a great job of describing the Fed and the bank bailouts as: “A clear case of socialism for the rich and rugged, you’re on your own individualism for everyone else.”
Some say the Fed is already audited.
Well, when the auditor came to Congress, she was asked the identity of the debt bought by the Fed. She didn’t know.
When pressed on the case she responded, “We do not have the jurisdiction to directly go and audit reserve bank activities.”
Some worry about Fed independence.
I do too. I worry about the Fed’s independence from the Executive branch. The Fed is supposed to be overseen by Congress. Congress created the Fed. The Fed is now in every nook and cranny of banking regulation since Dodd-Frank and it is a necessity that we not let the Executive branch gain unlimited power.
With Dodd-Frank, we created the Consumer Financial Protection Bureau, an agency with unprecedented regulatory powers and no Congressional oversight.
Any audit of the Fed should attempt to bring regulatory power back under the control of Congress.
Some worry that an audit would reveal which banks are shaky and lead to a panic.
The audit doesn’t occur until a year after the bill passes. When the 2011 audit occurred, no bank-runs ensued.
It is alarming that the Federal Reserve, which was granted Monopoly money-making power, is now specifically trying to stop my legislation. The Fed, with unlimited ability to print money, now prints that money to lobby against Congressional oversight. It is a disgrace and every citizen in the land should rise up and say: We the people are in charge and we demand an audit!
Peter Bernholz writes that public deficits have frequently been the reason for hyperinflations. The fight is twofold.
Audit the Fed is about transparency, but the fight is also about restoring fiscal sanity to our nation’s checkbook.
originally posted by: Gryphon66
Let's not pretend that the recent actions of the Fed are out of the scope of it's original creation, however:
[T]he Federal Reserve System was created by the Federal Reserve Act of December 23, 1913, establishing a new central bank intended to serve as a formal "lender of last resort" to banks in times of liquidity crisis—panics where depositors tried to withdraw their money faster than a normal fractional-reserve-based bank could pay it out.
Source
I am against using the People's money (illusory though that may be) to bail out big banks, but that is what the Federal Reserve system was created to do.
Do I think we should give Senators or Representatives who have proven that their only motivations are their own political careers even MORE CONTROL over our national economy, and that of the world because of our influence?
The Congress shall have the power ... to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures
originally posted by: Gryphon66
a reply to: SlapMonkey
Well, someone has to create jobs. The Republicans certainly aren't doing anything about it. Is this week 6 or 7 of the new Congress? Where are the jobs bills that Harry Reid was holding up?
So, now we've gone from the Fed hasn't been audited to the audits aren't good enough to let's put the Congress in day-to-day control of the Federal Reserve.
Well, at least you're being honest. This isn't about audits or good practices, this isn't about Congressional oversight, it's about Congressional CONTROL.