Statement of Congresswoman Mazie K. Hirono in Support of the Federal Reserve Transparency Act (H.R. 459)
Washington,
Jul 25 -
Mr. Speaker, I believe that transparency in the activities of government is extremely important and that we should endeavor to let in more sunlight, not less. Therefore, I am proud to support H.R. 459, the Federal Reserve Transparency Act.
The financial crisis of 2007-2008 cost nearly $6.5 trillion in household wealth. That’s home equity and savings for retirement and college that millions of people will likely never get back. Between December 2007 and early 2010 8.7 million jobs were lost—Including a record-breaking 779,000 in January of 2009 alone.
I raise these frightening numbers to illustrate a point—the impact of the financial crisis was disastrous, widespread, and occurred very quickly.
As a result, unprecedented steps were taken to halt the disastrous decline in our economy. These included the Federal Reserve (the Fed) stretching its emergency lending authority farther than it ever had to before. This, along with the legislative actions of Congress and the efforts of the Bush and Obama Administrations, helped to prevent the “Great Recession” from instead becoming “The Great Depression Redux.”
The Obama Administration and Congress have worked to rebuild our economy. Over 4.4 million jobs have been created over the past 28 consecutive months. The American automobile industry has been saved and is prospering. Communities across the nation benefitted from investments in transportation, energy, and other vital areas from the American Recovery and Reinvestment Act. The Fed has also contributed to this effort by keeping interest rates low and other measures.
But progress has not been fast enough. We are all frustrated by the current state of affairs. We are also rightly frustrated at the conduct of banks and bankers—private sector bankers and central bankers alike.
I recognize that the actions of the Fed are subject to Congressional oversight and audits by the Government Accountability Office. I was proud to support the Dodd-Frank Wall Street Reform and Consumer Protection Act, which included needed reforms of the Fed’s emergency lending authority, and required that the Government Accountability Office conduct an audit of the Fed’s emergency lending programs.
These are much needed steps. While I don’t share the view that we should abolish the Fed, or that the Fed’s activities are necessarily malicious, I do believe that the American people have a right to know how decisions about interest rates and other policies that impact their day-to-day lives are made.
The recent revelations that major international banks colluded to set the London Inter-Bank Offered Rate (LIBOR), which is an influential global interest rate, indicate that it is in the public interest to more closely scrutinize the activities of both financial market players as well as those that are supposed to be the unbiased referees like the Fed.
Today’s bill is a positive step toward doing that and I am proud to support H.R. 459.
