Thank you for contacting me regarding the Federal Reserve (the Fed). I understand your concerns about the Fed and the actions they’ve taken to stabilize the economy.
The Federal Reserve System was created to provide a ready reserve of liquid assets in case of financial emergency and to formulate monetary policy free from political influence. The seven members of the Federal Reserve Board of Governors are appointed by the President and confirmed by the Senate to serve a 14-year term each.
I understand the importance of an independent central bank, but I believe the Fed must show more discretion in its actions and provide a greater amount of transparency. That’s why I recently voted in favor of a measure attached to the Wall Street Reform and Consumer Protection Act (P.L. 111-203) that calls for a comprehensive review of the Federal Reserve's emergency lending activities. Under the terms of the bill, the Government Accountability Office (GAO) will audit the Fed to see which companies received upwards of $2 trillion in aid, and under what terms. Furthermore, GAO will be able to audit any future emergency actions taken by the Fed under the authority of the Financial Stability Oversight Council.
I know that Americans are worried about the risk of rapid inflation or deflation, please know that I will continue to support common-sense reforms in the Senate that will strengthen our economy and restore trust in our financial system. If you have any future concerns, please don’t hesitate to contact me again.
Sincerely,
Senator Bill Nelson
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