Idaho Congressman Mike Simpson has once again cosponsored H.R. 459, the Federal Reserve Transparency Act.  Currently the Government Accountability Office (GAO) can audit non-monetary policy functions of the Federal Reserve (Fed), but in the 1970’s Congress limited its ability to audit the Fed’s monetary policies. This bill would eliminate restrictions on GAO audits of the Federal Reserve, thus opening Federal Reserve operations to enhanced scrutiny.

“Like many Members of Congress, I was surprised to learn that GAO’s authority is so limited,” said Simpson. “In light of the recent crisis facing our financial system and its continued impact our economy, I believe it is time that we look carefully at the Fed’s policies, its role in regulating financial institutions in this country, and the impact that its decisions have on our economy.”

The GAO is restricted from conducting audits on transactions with foreign banks and governments, decisions and actions on monetary matters, and transactions made under the direction of the Federal Open Market Committee. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2012, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve.