What Would a Federal Reserve Audit Show?
• WSJWhat is excluded from GAO oversight? The GAO can’t review most of the Fed’s monetary policy actions or decisions, including discount window lending (direct loans to financial institutions), open-market operations and any other transactions made under the direction of the Federal Open Market Committee. It also can’t look into the Fed’s transactions with foreign governments, foreign central banks and other international financing organizations. (The GAO in 1993 produced this report on its limitations. The Federal Banking Agency Audit Act of 1978 put other parts of the central bank’s operations under GAO purview, as they had been for a decade until 1933.)
