Tuesday, September 1, 2009

Audit of Fed Now Likely

Barney Frank

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By Patrick A. Heller

In a town hall meeting last Thursday, Rep. Barney Frank, D-Mass., who is chair of the House Financial Services Committee, was asked what he was going to do about H.R. 1207, a bill in his committee sponsored by Rep. Ron Paul, R-Texas, and co-sponsored by 282 other representatives.

This bill calls for an audit of the Federal Reserve to be conducted by the Government Accountability Office. As part of such an audit, it is expected that there would be an audit of U.S. gold holdings and trading activities.

To just about everyone's surprise, Frank stated that he was working with Paul to slightly modify the bill to make it possible to gain congressional approval in October. The modifications he wants have to do with eliminating the concern that such an audit might interfere with the Fed's policy-setting abilities.

As this legislation has gained support, Frank had previously been non-responsive to inquiries on this bill. With enough votes in the House of Representatives pretty much assured, Frank's position as chair of the committee to which the bill was referred was the last practical obstacle to this legislation passing Congress.


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