The Federal Reserve would have to disclose more about supervision of the biggest, riskiest banks under legislation aimed at increasing Fed accountability introduced by Representative Scott Garrett, a New Jersey Republican on the House panel overseeing the central bank.
The bill would require the Fed to perform a cost-benefit analysis of any new banking rule and disclose more about bank stress tests. The Fed vice chairman would have to testify on financial rulemaking if the post of vice chairman for supervision remains unfilled, and the Fed Board would need to release to Congress its internal audit of supervision and regulation.
"Millions of Americans are impacted by the Federal Reserve's regulatory policies, yet by and large it operates in secret," Garrett, a member of the House Financial Services Committee, said today in an e-mail. "It is vital to ensure that the Fed is accountable to the people's representatives."
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The legislation is another sign that Fed Vice Chairman Janet Yellen, set to succeed Ben S. Bernanke as chairman on Feb. 1, will become the nation's top monetary policy maker amid rising congressional scrutiny over Fed activities and intentions. Other legislative committees are probing the Fed.
Representative Kevin Brady, a Republican from Texas and chairman of the Joint Economic Committee, has introduced two bills focused on the Fed, one calling for a monetary commission to study the central bank and its policies, and another that would alter the Fed's goals and policy governance structure.
Representative Jeb Hensarling, another Texas Republican and chairman of the financial services panel, pledged last month to undertake the "most rigorous examination of the Fed's purposes, policies, and track record in its history" in a set of hearings this year.
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