Dear Mr. Furrh:
Thank you for contacting me with your thoughts on the Federal Reserve System. I appreciate having the benefit of your views on this issue.
The Federal Reserve was created through the Federal Reserve Act in 1913. The Federal Reserve was created as a semi-public, semi-private institution whose main responsibilities include setting national interest rates, managing our monetary policy to ensure maximum employment and stable prices, and supervising and regulating our banking system to ensure the safety of and soundness of our banks. It is headed by Board of Governors who are appointed by the president and it oversees 12 regional banks located throughout the U.S. The current Chairman of the Federal Reserve is Ben Bernanke.
As you may know, Rep. Ron Paul (R-TX) introduced the Federal Reserve Transparency Act of 2011 (H.R. 459), which would eliminate restrictions on the Government Accountability Office (GAO) – the federal government’s nonpartisan watchdog group – to audit the Federal Reserve and open its operations to enhanced scrutiny. Like you, I feel this legislation is necessary to provide the American public with an accurate assessment of our nation’s monetary policies. This bill has been referred to the House Committee on Oversight and Government Reform.
I understand your concerns with the power granted to the Federal Reserve by Congress, especially now that the Fed has committed trillions of dollars to programs to address our current financial crisis. The Fed plays an important role not only in stabilizing the economy through controlling interest rates, but also providing security for the banking system. Specifically, the Fed brings crucial stability to our economy through its mandate to ensure that our banks are operating in a safe and sound manner, as evidenced by the fact that there has not been a classic “bank run” where account holders withdraw all their money from a bank en masse since 1934. However, with so much money at stake, it is important that Congress and taxpayers have an accurate accounting of the Fed’s actions consistent with its stability mandate.
Please be assured I will keep your views in mind should this or any other relevant legislation come before me as I continue my work as a member of the House Financial Services Committee.
Thank you again for contacting me. I appreciate having the opportunity to serve you in the United States House of Representatives. I encourage you to visit my website at
www.hensarling.house.gov/ where you can sign up for my e-newsletter. The website also provides links to my YouTube, Facebook, and Twitter pages, all of which will help bring my work in Washington, D.C. home to you.
Yours respectfully,
JEB HENSARLING
Member of Congress