Audit the Fed? Bernanke fights back against Ron Paul
July 18, 2012: 4:11 PM ET
NEW YORK (CNNMoney) -- In what is likely to be the last showdown between Ron Paul and Ben Bernanke, the Federal Reserve Chairman once again fought back against the Congressman's calls to audit the Federal Reserve.
Rep. Paul, a Republican from Texas and author of "End the Fed", has been trying for years to pass a law that would give Congress the ability to examine the central bank's decision-making process.
Now, he's closer than ever before, after his colleagues voted last month to finally take up his bill on the House floor. The vote is expected to happen next week.
It's important though not to confuse the aim of the bill with a financial audit. The Federal Reserve's finances are already audited every year by an independent accounting firm. (Last year it was Deloitte and Touche). The central bank also publishes its balance sheet every Thursday online.
Instead, what Paul is aiming for is a full investigation of the way the Fed determines monetary policy.
Those deliberations currently take place behind closed doors. Minutes are released with a three-week lag, and full transcripts are published only five years after the fact.
Bernanke, speaking at a hearing about the economy and monetary policy Wednesday, said he prefers to keep it that way to protect the Fed's independence. Having Congressional investigators in the room could "create a political influence" and have a "chilling effect," the Chairman said.
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HSBC's Compliance Chief to Step Down
Updated July 18, 2012, 10:51 a.m. ET
WASHINGTON—Chastened HSBC Holdings PLC executives on Tuesday told U.S. lawmakers they are trying to change their operations after a Senate investigation found the bank did business with money launderers and other suspicious clients.
During a daylong hearing before a Senate subcommittee, HSBC's top antimoney-laundering executive announced he is stepping down. Bank officials outlined millions of dollars in increased spending on compliance efforts.
A yearlong investigation by the Senate Permanent Subcommittee on Investigations alleged HSBC's U.S. bank became a conduit for money-launderers and potential terrorist financiers, and for the evasion of sanctions against Iran and other countries. The committee's report, released before the hearing, also found "systemic failures" at the bank's main U.S. government regulator, the Treasury Department's Office of the Comptroller of the Currency...
The biggest problem Senate investigators found was at HSBC's Mexico branch, which moved billions of dollars of bulk cash through HSBC's U.S. bank despite suspicions that client accounts were being used for laundering of drug cartel and other illicit funds. The Mexico bank had a committee overseeing compliance efforts, but many of its meetings were faked, the report found.
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