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US "Federal" Reserve used to prop up failed Irish Banks
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05-12-2010 11:20pmThe Independent writes
Files released by the US Federal Reserve, America's central bank, reveal that AIB racked up cumulative borrowings of more than $27bn (€20bn) under the Fed's Term Auction Facility, which was part of the response to prevent the complete collapse of the financial system around the time of the Lehman Brothers flame-out.
Some of you here might know that the Federal Reserve has the ability to create money out of thin air whenever it wants.
You shouldn't be fooled by the use of the word "Federal" in its name, it is no more Federal than Federal Express.
The reserve banks are private organisations run by bigger banks to maximise profits for themselves at the expense of the tax payer in the US and abroad.
Money created out of thin air is lended to other smaller banks at 0% interest who then lend out to ordinary people that promise to work hard paying back the loan with interest added.
The bailout for banks from the IMF is exactly just more money created out of thin air with Irish tax payer as collateral.
Can people not see what's happening? Ireland is being enslaved by an incredibly corrupt banking system.
Can Irish people honestly support what is clearly a scam?
article here3
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Wasn't that data around since the middle of last week? Hardly surprising anyway, it just underlines the global nature of the recession and the Fed's role in trying to rescue the international financial system. Hardly a surprise I would have thought.
Personally, i don't think that releasing that kind of information really helps anyone and I'm surprised it was released at all. It just reveals internal weaknesses that could be corrected anyway, and tends to scare off wealth investors. Anyway, in terms of the Irish banks, this information is hardly shocking.0 -
Do you support the continued bailout of Irish banks at the expense of Irish Tax payers?0
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No. And what's that got to do with Fed lending?
You know what, forget that question. I presume it will probably only be decorated with mini rants on the evils of money and banks.
I just think there is nothing shocking in the article, it seems quite normal, sorry.0 -
No. And what's that got to do with Fed lending?
I would have thought it obvious, i'll try to explain as simplistic as possible for you.
The "Federal" reserve creates money out of thin air backed by absolutely nothing. It lends this imaginary wealth to banks who then lend their imaginary wealth to people who work hard to pay it back with interest.
This system is so totally fraudulent because it gives banks the power to control the wealth of all people.
So, it has cost the "Federal" reserve absolutely nothing to give Irish banks $27 bln which we have no idea what it was used for and it doesn't matter anyway because it isn't my loan, it isn't a loan for Irish people.You know what, forget that question. I presume it will probably only be decorated with mini rants on the evils of money and banks.
Well, i would take your answer as "Yes, I do support the bailout"it seems quite normal, sorry.
I'm sure it does, your apology is accepted.0 -
Thank you for your explanation. I've just had a Eureka moment. Excuse me while I tear up my degree and subscribe to your newsletter.
If you want to discuss the significance of the article in realistic terms, I'd be glad to do so. But I'm not debating a conspiracy theory.0 -
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Thank you for your explanation. I've just had a Eureka moment. Excuse me while I tear up my degree and subscribe to your newsletter.
You have a degree? so what? nearly the whole country has one at this stage. You feel you're more privileged to give an opinion because of that? rubbish.If you want to discuss the significance of the article in realistic terms, I'd be glad to do so. But I'm not debating a conspiracy theory.
You can't refute facts by calling someone a conspiracy theorist.
If there are obvious flaws in the arguments I made, point them out.
I won't hold my breath..just expect childish name calling.0 -
Firstly, the Federal Reserve is not private, for the benefit of people who don't venture into US politics forum see here.
Secondly the Fed manages the supply of money. It does this by "printing money" which is the layman term for buying up US government bonds. Buying US government bonds increases the supply of money thus reducing the interest rates that banks charge one another. The Fed acts carefully not to introduce too much of this liquidity into the system by keeping an eye on inflation. If the Fed were to introduce too much liquidity i.e. print too much money then the currency would lose its value and inflation would skyrocket. See here for more.
Also note that the Irish banks, like all banks, would have paid interest on the loans they received. The Fed was offering these loans because following the collapse of Lehman, the banks did not trust lending to one another and the financial markets were seizing up.
Our crisis was unrelated to this. The Irish crisis was the result of the collapse of a speculative bubble in property with result being major losses suffered on loans made by the banks to property developers. In contrast, the US crisis was the result of complex financial instruments which masked the real risk of the underlying loans.
With regards to the IMF, it is not a central bank. It does not manage the money supply, its funds come from its member countries and it offers loans to countries in danger of default.
Where the real pressure to bail out the banks is coming from would seem to be from Europe. If our banks failed, there would likely be major contagion effects to other European economies with exposure to Irish banks and of course further contagion in the sovereign debt crisis. Not to mention we would effectively be without a financial system.
Sometimes the markets get carried away with themselves, make bad investments and the entire system has to face the losses. There is no conspiracy here. Unfortunately for the Irish taxpayer though our government has decided to take the losses rather than the bank bondholders.0 -
Later 10, isn't the US 'Ferdal Bank' just a conglomerate of 5 or so Israeli mega-wealthy families who literally do 'create' money out of thin air and launder it via the American Government?
Their trick would seem to be to print money for printing and paper cost, lend it at real rates - but crucially not the interest - which has to be found by more borrowing, etc., and etc., in an impossible spiral leading to ever more debt which is financed by...... The US Federal Bank?
The only individusal who could break this sinister chain is an American President, two of whom tried - Garfield and Kennedy - both assassinated very soon after passing the necessary Law.0 -
Yeah, banks are our real enemy, always have been. Bankers have actually deliberately caused recessions to pursue their agenda. Money really is the root of all evil, and we're starting to see how bankers have controlled everything for the last three centuries. Eventually the people will get tired of working harder and longer to pay off more and more debt, then we can see about setting up a sensible currency system.
As usual, the bankers have their apologists, even after all that has happened in the last few weeks. Their usual tactic, as evinced above, is to pretend it's all very complicated.
The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.
JK Galbraith.
It's good to see people are starting to question the monetary system. People know when something is wrong, even though the banksters try to hide it.
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Moved to CT0
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Anonymous1987 wrote: »Firstly, the Federal Reserve is not private, for the benefit of people who don't venture into US politics forum see here.
I would refer you to Lewis v. United States, 680 F.2d 1239 (1982)Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act.
Affirmed:
There are no sharp criteria for determining whether an entity is a federal agency within meaning of the Federal Tort Claims Act, but critical factor is existence of federal government control over "detailed physical performance" and "day to day operation" of an entity
Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations
The US court seems to agree the Federal Reserve is not a government entity.
It states clearly that it is privately owned.
NAMBLA claimed on their website they weren't pedophiles but lobbied to have age of consent for young boys abolished so should we believe they aren't pedophiles?
Just because an organisation makes a claim, doesn't necessarily mean they're being honest about it.
The Federal reserve claims it is independent...but not private :rolleyes:Secondly the Fed manages the supply of money. It does this by "printing money" which is the layman term for buying up US government bonds. Buying US government bonds increases the supply of money thus reducing the interest rates that banks charge one another. The Fed acts carefully not to introduce too much of this liquidity into the system by keeping an eye on inflation. If the Fed were to introduce too much liquidity i.e. print too much money then the currency would lose its value and inflation would skyrocket. See here for more.
Yes, and that's the problem.Fed are a private bank with the sole purpose of generating wealth from nothing.
They issue credit created out of thin air and lend it to financial institutions at 0% interest.
This is absolute fact.
I'm not sure why later10 earlier tried to claim this is "conspiracy theory" - it's well documented the FED have the power to issue money backed by absolutely nothing.
If i'm wrong, please tell me where.Also note that the Irish banks, like all banks, would have paid interest on the loans they received. The Fed was offering these loans because following the collapse of Lehman, the banks did not trust lending to one another and the financial markets were seizing up.
What was the interest rate on the loans?
If I recall correctly, Bernanke dropped the rate to 0% following the collapse of 08. So if Irish banks were borrowing at 0%, why would they need to pay back those loans with interest?
It's irrelevant anyway, the money was created from nothing and now Irish tax payers are expected to pay it back...it's disgusting.Our crisis was unrelated to this. The Irish crisis was the result of the collapse of a speculative bubble in property with result being major losses suffered on loans made by the banks to property developers. In contrast, the US crisis was the result of complex financial instruments which masked the real risk of the underlying loans.
Our crisis is pretty much the same as any other financial crisis that's happened in the world.
Banks made loans to people they knew couldn't possibly pay back..Banks didn't care because the debt was guaranteed by government anyway.
In the US, 90% of current mortgages are guaranteed..it's the same story over and over again and it's the same people defending this criminality.
"complex financial instruments" - don't you mean securitized mortgages?
Mortgages for people the banks knew couldn't pay back?
Let's be honest, anon..you sound like you work in finance with your descriptions but I know how the US collapsed and it wasn't due to "complex financial instruments" - that's completely false, it was simply terrible lending practices.With regards to the IMF, it is not a central bank. It does not manage the money supply, its funds come from its member countries and it offers loans to countries in danger of default.
The only country with veto power is the US, correct?
And can you confirm that this organisation was almost bankrupt until Ireland needed a bailout?
It's a bit like the UN, many countries are part of it but there's only 1 or 2 that have any real power within it.
In the case of IMF, with US as the only country with veto, you can't say this is "international"
Other countries may be part of the IMF but it is essentially an organisation which works to protect US economic interests.Sometimes the markets get carried away with themselves, make bad investments and the entire system has to face the losses. There is no conspiracy here. Unfortunately for the Irish taxpayer though our government has decided to take the losses rather than the bank bondholders.0 -
to mods of CT: this should be in politics forum, not CT. please move it back to politics.0
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That the Federal Reserve is a private institution controlled by an elite in order to force America into an unpayable debt is a long established CT and belongs here, not in politics.0
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robbyvibes wrote: »I would refer you to Lewis v. United States, 680 F.2d 1239 (1982)
Firstly this is in reference to one of the regional Federal Reserve Banks which are structured differently to the Federal Reserve itself. Secondly, I'm no lawyer but if you read this, you will notice that this is in reference to Federal Tort Law, basically for insurance purposes.robbyvibes wrote: »Yes, and that's the problem.Fed are a private bank with the sole purpose of generating wealth from nothing.
They issue credit created out of thin air and lend it to financial institutions at 0% interest.
This is absolute fact.robbyvibes wrote: »I'm not sure why later10 earlier tried to claim this is "conspiracy theory" - it's well documented the FED have the power to issue money backed by absolutely nothing.robbyvibes wrote: »What was the interest rate on the loans?robbyvibes wrote: »If I recall correctly, Bernanke dropped the rate to 0% following the collapse of 08. So if Irish banks were borrowing at 0%, why would they need to pay back those loans with interest?
See here, the federal funds rate is the target rate, at the moment in and around 0.2% not 0%. The discount rate at which the Fed lends is 0.75. There is much confusion with this because as you can see there are a multitude of interest rates.robbyvibes wrote: »It's irrelevant anyway, the money was created from nothing and now Irish tax payers are expected to pay it back...it's disgusting.robbyvibes wrote: »Our crisis is pretty much the same as any other financial crisis that's happened in the world.
Banks made loans to people they knew couldn't possibly pay back..Banks didn't care because the debt was guaranteed by government anyway.robbyvibes wrote: »"complex financial instruments" - don't you mean securitized mortgages?
Mortgages for people the banks knew couldn't pay back?
Let's be honest, anon..you sound like you work in finance with your descriptions but I know how the US collapsed and it wasn't due to "complex financial instruments" - that's completely false, it was simply terrible lending practices.robbyvibes wrote: »The only country with veto power is the US, correct?robbyvibes wrote: »And can you confirm that this organisation was almost bankrupt until Ireland needed a bailout?robbyvibes wrote: »It's a bit like the UN, many countries are part of it but there's only 1 or 2 that have any real power within it.
In the case of IMF, with US as the only country with veto, you can't say this is "international"
Other countries may be part of the IMF but it is essentially an organisation which works to protect US economic interests.0 -
Later 10, isn't the US 'Ferdal Bank' just a conglomerate of 5 or so Israeli mega-wealthy families who literally do 'create' money out of thin air and launder it via the American Government?Their trick would seem to be to print money for printing and paper cost, lend it at real rates - but crucially not the interest - which has to be found by more borrowing, etc., and etc., in an impossible spiral leading to ever more debt which is financed by...... The US Federal Bank?The only individusal who could break this sinister chain is an American President, two of whom tried - Garfield and Kennedy - both assassinated very soon after passing the necessary Law.0
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It's self evident in US law that the Federal Reserve is a private entity and not an arm of the American government.
It does the moderation of this site no credit to attempt to dismiss well-established fact as a conspiracy theory.0 -
Cavehill Red wrote: »It's self evident in US law that the Federal Reserve is a private entity and not an arm of the American government.The plan adopted in the original Federal Reserve Act called for the creation of a System that contained both private and public entities. There were to be at least eight, and no more than 12, private regional Federal reserve banks (12 were established) each with its own branches, board of directors and district boundaries (Sections 2, 3, and 4) and the System was to be headed by a seven member Federal Reserve Board made up of public officials appointed by the President and confirmed by the Senate (strengthened and renamed in 1935 as the Board of Governors of the Federal Reserve System with the Secretary of the Treasury and the Comptroller of the Currency dropped from the Board - Section 10). Also created as part of the Federal Reserve System was a 12 member Federal Advisory Committee (Section 12) and a single new United States currency, the Federal Reserve Note (Section 16).
The Federal Reserve is public, the regional Federal Reserve Banks are private, there is a difference.0 -
Yeah, banks are our real enemy, always have been. Bankers have actually deliberately caused recessions to pursue their agenda.Money really is the root of all evil, and we're starting to see how bankers have controlled everything for the last three centuries. Eventually the people will get tired of working harder and longer to pay off more and more debt, then we can see about setting up a sensible currency system.As usual, the bankers have their apologists, even after all that has happened in the last few weeks. Their usual tactic, as evinced above, is to pretend it's all very complicated.0
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Anonymous1987 wrote: »http://en.wikipedia.org/wiki/Federal_Reserve_Act#The_Act
The Federal Reserve is public, the regional Federal Reserve Banks are private, there is a difference.
Not in law, there isn't. The Federal Reserve is not a public institution. Even the wiki quote you provide makes clear that only the board is made up of public appointees. The shareholders are private banks.
If you can demonstrate for me how the Federal Reserve is a publicly owned institution, I'd be fascinated to hear it. The law states it is not, and not one of the 200 or so amendments since has changed that fact one iota.0 -
Anonymous1987 wrote: »While banking failures have forced many an economy into recession, its more to do with short decision making to meet quarterly targets and speculation about investments than conspiracy.
Money is amoral, merely a method of transaction, the problem with banks is we need a banking system to run the economy and banks know this.
If that is directed to me, I am not an apologist. I wasn't trying to claim its too complicated, in fact I've gone out of my way to explain as clearly as possible the system. The only place where I mentioned complexity was in reference to the 2007 crisis where people, including bankers, did not understand the true level of risk associated with the financial instruments. Whether there was an intention to mask the risk or just that the level of risk was poorly understood is open to debate. Regardless this was the action of private bankers not the Fed.
I'm calling troll. This topic should be moved back to whatever forum it came from.0 -
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Cavehill Red wrote: »Not in law, there isn't. The Federal Reserve is not a public institution. Even the wiki quote you provide makes clear that only the board is made up of public appointees.
http://en.wikipedia.org/wiki/Federal_Reserve_Board#Board_of_GovernorsCavehill Red wrote: »The shareholders are private banks.Cavehill Red wrote: »If you can demonstrate for me how the Federal Reserve is a publicly owned institution, I'd be fascinated to hear it. The law states it is not, and not one of the 200 or so amendments since has changed that fact one iota.0 -
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http://fskrealityguide.blogspot.com/2008/06/compound-interest-paradox-revisited_14.html
Greenspan himself admits the agency is independent..
http://www.youtube.com/watch?v=pVmxQsvj6lo0 -
http://fskrealityguide.blogspot.com/2008/06/compound-interest-paradox-revisited_14.html
Greenspan himself admits the agency is independent..
http://www.youtube.com/watch?v=pVmxQsvj6lo
Yes it is independent, to prevent political interference in the money supply. Independent does not mean private. Think about it, the Judiciary is independent of the Executive.0 -
I'm calling troll. This topic should be moved back to whatever forum it came from.
Careful now, calling troll can see you banned
But seeing as you seemed to have missed it earlier, here is yekahs post about it again
http://www.boards.ie/vbulletin/showpost.php?p=69407660&postcount=140 -
I thought the point of the Ct's on this is that we shouldnt have to pay extra to use money for transactions.Its like a credit card but the charges are passed on and shifted round and ofc you cant pay back what doesnt exist without creating more money to pay it back but then you need to create more to pay that back etc.
There is a state in america i hear has its own currency now and is doing better than its neighbours with no price being paid to use the money for trade etc.
Barter systems used to work long ago.Why is it we cant use a barter system with money?
Why do we have to pay to trade our goods these days?0 -
I thought the point of the Ct's on this is that we shouldnt have to pay extra to use money for transactions.Its like a credit card but the charges are passed on and shifted round and ofc you cant pay back what doesnt exist without creating more money to pay it back but then you need to create more to pay that back etc.There is a state in america i hear has its own currency now and is doing better than its neighbours with no price being paid to use the money for trade etc.Barter systems used to work long ago.Why is it we cant use a barter system with money?Why do we have to pay to trade our goods these days?0
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Anonymous1987 wrote: »Yes it is independent, to prevent political interference in the money supply. Independent does not mean private. Think about it, the Judiciary is independent of the Executive.
True , in theory. Famous Fed apologist Edward Flaherty outlines below how the board works, with a rebuttal from The Creature from Jekyl Island author Edward Griffin.
Flaherty: Hypothesis: Each of the 12 Federal Reserve banks is a privately owned corporation. Like any firm, their main objective is to maximize profits. They do so by lending the government money and charging interest. They manipulate monetary policy for their own gain, not for the public good. Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publicly-appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board.
My reply: Basically, Flaherty is correct as far as he goes. But, as we shall see in so many of his statements, he stops short of the entire truth. A half-truth is just as much of a deception as an outright lie. Flaherty says that the Board of Governors is politically appointed. This is true and it is supposed to make us feel safe in the thought that the President responds to the will of the people and that he selects only those who have the public interest at heart. The part of the story omitted by Flaherty is that the President does not select these people from his own personal address book, nor does he ask the public to submit nominations. With few exceptions, he makes appointments from lists given to him by the staffs of banking committees of Congress and from private sources that have been influential in his election campaign. The most powerful of all these groups are the financial institutions (including prominent members of the Fed itself) and the media corporations over which they have effective control. One does not have to be a so-called conspiracy theorist to recognize the tremendous influence that these institutions have over the outcome of presidential campaigns, and anyone with knowledge of how our current political system works will understand why the President makes exactly the appointments that the banks want him to make. All one has to do to see the accuracy of this appraisal is to examine the backgrounds and attitudes of the men who receive the appointments. While there is an occasional token individual who appears to come from the consumer sector of society, the majority are bankers deeply committed to the perpetuation of the system that sustains them. Anyone who would seriously challenge the power of the banking cartel would never be appointed. So, while Flaherty is correct in what he says, the implication of what he says (that the Fed is subject to control of the people through the political process) is entirely false.
Why isnt it possible for the American government to produce its own debt free money??
To whom they owe this debt to??
http://fskrealityguide.blogspot.com/2007/11/national-debt-who-is-creditor.html
Why has the Fed never been audited ?
Should it have been audited ( and I'm missing something ) , then why is Ron Paul repeated asking for it to be audited??
Is he missing something too??
http://www.ronpaul.com/legislation/audit-the-federal-reserve-hr-1207/
Why was the Fed created in secrecy in 1913, ushered in over Christmas when there were only a handful of Congressmen present??
Regardless of whether the above is true or not , a close examination of the Fed throws up more questions than answers.0 -
The Islamic banking system seems like a fair one ,at least fairer than the greedy one used througout the western world. see full article here do away with the Rothschild bail out and adopt the Islamic banking system and tweak it to our needs ,maybe thats what this country needs
Principles
Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba (usury). Common terms used in Islamic banking include profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah).
In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the bank's profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabaha. Another approach is EIjara wa EIqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid).
An innovative approach applied by some banks for home loans, called Musharaka al-Mutanaqisa, allows for a floating rate in the form of rental. The bank and borrower form a partnership entity, both providing capital at an agreed percentage to purchase the property. The partnership entity then rents out the property to the borrower and charges rent. The bank and the borrower will then share the proceeds from this rent based on the current equity share of the partnership. At the same time, the borrower in the partnership entity also buys the bank's share of the property at agreed installments until the full equity is transferred to the borrower and the partnership is ended. If default occurs, both the bank and the borrower receive a proportion of the proceeds from the sale of the property based on each party's current equity. This method allows for floating rates according to the current market rate such as the BLR (base lending rate), especially in a dual-banking system like in Malaysia.
There are several other approaches used in business transactions. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal to a certain percentage of the company's profits. Once the principal amount of the loan is repaid, the profit-sharing arrangement is concluded. This practice is called Musharaka. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank so that both profit and risk are shared. Such participatory arrangements between capital and labor reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, resulting in a balanced distribution of income and not allowing lender to monopolize the economy.
Islamic banking is restricted to Islamically acceptable transactions, which exclude those involving alcohol, pork, gambling, etc. The aim of this is to engage in only ethical investing, and moral purchasing.
In theory, Islamic banking is an example of full-reserve banking, with banks achieving a 100% reserve ratio.[26] However, in practice, this is not the case, and no examples of 100 per cent reserve banking are observed.[27]
Islamic banks have grown recently in the Muslim world but are a very small share of the global banking system. Micro-lending institutions founded by Muslims, notably Grameen Bank, use conventional lending practices and are popular in some Muslim nations, especially Bangladesh, but some do not consider them true Islamic banking. However, Muhammad Yunus, the founder of Grameen Bank and microfinance banking, and other supporters of microfinance, argue that the lack of collateral and lack of excessive interest in micro-lending is consistent with the Islamic prohibition of usury (riba).[28][29]0 -
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Why isnt it possible for the American government to produce its own debt free money??Hyperinflation becomes visible when there is an unchecked increase in the money supply (see hyperinflation in Zimbabwe) usually accompanied by a widespread unwillingness on the part of the local population to hold the hyperinflationary money for more than the time needed to trade it for something non-monetary to avoid further loss of real value. Hyperinflation is often associated with wars (or their aftermath), currency meltdowns like in Zimbabwe, and political or social upheavals.To whom they owe this debt to??Why has the Fed never been audited ?
Should it have been audited ( and I'm missing something ) , then why is Ron Paul repeated asking for it to be audited??
Is he missing something too??
Why was the Fed created in secrecy in 1913, ushered in over Christmas when there were only a handful of Congressmen present??
I hope the following answers your questionsSince the Federal Reserve has considerable discretion in carrying out its responsibilities, to whom is it accountable?
The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested.
To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal Reserve activities.
Are the Federal Reserve System and Reserve Banks ever audited?
The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review. Under the Federal Banking Agency Audit Act (enacted in 1978 as Public Law 95-320), which authorizes the Comptroller General of the United States to audit the Federal Reserve System, the Government Accountability Office (GAO) has conducted numerous reviews of Federal Reserve activities. In addition, the Board's Office of Inspector General (OIG) audits and investigates Board programs and operations as well as those Board functions delegated to the Reserve Banks. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report (before 2002, the reviews were listed in the Board's Annual Report: Budget Review).
The Board's financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the OIG. The financial statements of the Reserve Banks are also audited annually by an independent outside auditor. In addition, the Reserve Banks are subject to annual examination by the Board. The Board's financial statements and the combined financial statements for the Reserve Banks are published in the Board's Annual Report.Regardless of whether the above is true or not , a close examination of the Fed throws up more questions than answers.0
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