The House of Representatives has just passed a bill that would authorize the federal government to audit the Federal reserve. The bill may not go anywhere, but an increasing number of individuals want more transparency in how the country’s central bank conducts its affairs.

Fed to face large audit

The Federal reserve controls how much a dollar is worth and the cash it takes for a bank it lend mortgages, installment loans and more. It was produced in 1913 and affects daily life regularly with its control of lending and inflation. Many people do not realize how much it impacts their life every single day.

The Fed is also one of the many “independent government agencies.” In other words, it’s a private company that is part of the government. Some think not enough information is made publicly available by the Federal reserve about its dealings, which has led to many legislators and citizens calling for a bill that would audit the Fed, or rather force the bureau to open its books totally to scrutiny.

Bill to audit passes House

A bill has just passed the House of Representatives, according to ABC, that would “open the books” of the Federal reserve, possibly to the Government Accountability Office or some other agency. The bill was, naturally, authored and sponsored by Representative Ron Paul of Texas, a constant critic of “the Fed.” The bill approved 327 for to 98.

The basic idea of the bill would allow more access to Fed policy decisions. Right now, records from meetings where the Fed decides to adjust the inflation rate on currency take three weeks to be released and five years for the transcript to come out. The agency publishes its balance sheet every week online too. CNN points out that Deloitte and Touche just did an internal audit. The audits are done every year. The idea of the bill is for more instant access though.

Issue with audit

Congress might end up controlling the Federal reserve if the brand new Audit the Federal reserve law is passed; Federal reserve Chairman Ben Bernanke is worried about, according to Bloomberg. This could cause a lot of corruption and manipulation of the Fed, which is a massive concern for Bernanke. He has no problem with more transparency in finances though.

It is not that likely that the bill will become law, Representative Barney Frank said about the law, according to Bloomberg.

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