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Federal Reserve Transparency - Audit the Fed

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Guest Enron Ex

Don't worry. Everyone here is about to get their wish. Barney Frank is on board now.

 

I want to restrict the power of the Fed in a number of ways," said Frank in response to a question about the bill.

 

"They have had since 1932... the right to intervene in the economy almost whenever they" wanted to, Frank said, noting that the Fed relied on its extraordinary lending power to forward billions to financial institutions last fall. He intends to curtail that lending power, he said.

 

"Finally we will subject them to a complete audit," he said. "I have been working with Ron Paul, the main sponsor of that bill. He agrees that we don't want to have the audit appear as if it is influencing monetary policy, because that would be inflationary and Ron and I agree on that.

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Guest Fedup

Just to update this blog. The Federal Reserve filed a notice it will appeal a judge’s order requiring the central bank to identify the companies that benefited from its emergency loans.

 

The filing with the U.S. Court of Appeals in New York today was authorized by Solicitor General Elena Kagan, the Obama administration’s top courtroom lawyer, according to Charles Miller, a spokesman for Kagan.

 

“Public disclosure is likely to cause substantial competitive injury to these financial institutions including the loss of public confidence in the institution, runs on banks and possible failure of some institutions,” the Fed said in its notice, which asks to put the lower court’s order on hold until the appeal is prepared.

 

You can read the exact transcript here:

 

http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2008cv09595/335178/43/

 

Here is a breakdown of the case.

 

http://news.justia.com/cases/featured/new-york/nysdce/1:2008cv09595/335178/

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Guest Senator Merkley

In the wake of the Federal Reserve’s extraordinary actions last year to stabilize the financial system, U.S. Senators Jeff Merkley (D-OR) and Bob Corker (R-TN), members of the Senate Banking Committee, today introduced legislation that will require the Government Accountability Office (GAO) to conduct an audit of the Fed’s emergency lending programs. The Federal Reserve Accountability Act will monitor and protect taxpayer dollars without intruding upon the Federal Reserve’s independent monetary policy or its role as lender of last resort.

 

"Transparency and accountability are fundamental principles of representative government,” Merkley said. “During this financial crisis, Federal Reserve credit contributed greatly to the stabilization of the system. In doing so, the Federal Reserve departed significantly from its traditional relationship with markets and took on unprecedented new risks. Such a significant change in the Federal Reserve’s traditional activities demands responsible, robust oversight. The Federal Reserve Accountability Act strikes the right balance between protecting taxpayer dollars and respecting the central bank’s responsibility to manage monetary policy."

 

"The Federal Reserve has provided our financial system with emergency credit during this time of financial hardship, and in the course of doing so, has seen a $1.4 trillion increase in its balance sheet. Despite its independence, these are still taxpayer dollars at risk, and many Americans have called for an audit of the Fed," Corker said. “This bill is the way to do it. We give the Government Accountability Office the authority to audit the Fed's emergency credit facilities without inappropriately compromising the independence of the Fed or politicizing its role in crafting monetary policy."

 

The Federal Reserve Accountability Act would require the GAO to audit all remaining emergency lending programs not already subject to audit. To protect against the risk that disclosure of the participation of particular institutions could disrupt markets, the GAO would be required to redact the names of the specific institutions. Names would, however, be made available one year after each emergency program is no longer used. In addition, to encourage greater accessibility for the average taxpayer, the Fed would be required to place these GAO audits along with additional audit materials on its website under a new “Audit” section.

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Guest Congressman Ron Paul

I hope you join me in my firm conviction that now is the time to fight back against the out of control Federal Reserve and continued Wall Street plundering of our tax dollars.

 

The threat isn't hard to see -- just look all around us. Our constitutional principles and freedoms are being assaulted at every turn. More bailouts, trillion dollar "stimulus" plans, huge new debt burdens for our children, simply printing money to cover our failed policies -- I could go on and on. You and I both know that President Obama is going to keep going and going unless someone puts a stop to the madness.

 

But the good news is there is a way to fight back. And that fight starts today -- by "Auditing the Fed" and showing the American people just how the Fed has abused its power, debauched the dollar, and helped strangle our economy.

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Guest John F. Tate

Trillions of dollars are being stolen from the U.S. taxpayer.

 

Right now, you and I are seeing the worst plundering of a country's wealth in the history of civilization, led by an out of control Federal Reserve.

 

But together you and I CAN put a stop to it all.

 

With your help (including submitting the petition linked below to your Congressman and Senators) today, Representative Ron Paul, Senator Jim DeMint and Campaign for Liberty are ready to fight back, by taking the battle straight to the heart of the problem - the Federal Reserve itself.

 

Just think about the scope of the problem for a minute: The massive, outrageous amount of dollars committed to the economic bailouts in recent months totals:

 

More than the socialist New Deal ... More than the entire Iraq debacle ... More than the 1980's savings and loan mess ... More than the Korean War ...

 

COMBINED.

 

When will it all end?

 

It's time you and I put a stop to a renegade Federal Reserve by exposing the Fed's out of control actions to the American people. And Congressman Ron Paul and Senator Jim DeMint have a bill before Congress to do just that, known as the "Audit the Fed" Bill (HR 1207 and S 604).

 

That's why it's vital you click here to submit your "Audit the Fed" petition in support of Congressman Paul's bill.

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Guest John F. Tate

Just a few months ago, there was no chance of passing any legislation like the Audit the Fed Bill. So I guess there has been one "CHANGE."

 

You see, with the piling up of trillions of dollars in out of control "bailouts" of Wall Street and international bankers, even many politicians in Washington want to show you they're "being responsible."

 

What better way for Congress to do this than by auditing the Federal Reserve to account for the trillions stolen from the U.S. taxpayers?

 

More and more Congressmen are already feeling the pressure and are signing up to support this bill. I've even received word this bill could move in the next few weeks in the U.S. House.

 

When that happens, you and I must be ready to fight.

 

And, it's both a bill we CAN pass, and one that is vital to exposing the massive corruption and dollar manipulation at the Federal Reserve.

 

You see, after regulating, taxing, spending, borrowing and printing us into what looks like the worst recession in decades, establishment politicians and power brokers are assuring us they're working hard to "fix" our economic woes. What is their solution? You guessed it. More of the same!

 

And even if the Audit the Fed Bill is defeated this time, just forcing a vote is a win/win situation.

 

Can you imagine how many politicians will pay the price at the ballot box in 2010 when you and I tell the American people their Congressman somehow lost trillions of taxpayer dollars and refused to even LOOK for it?

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Guest John F. Tate

Now we just need to show Congress the American people demand action on the Audit the Fed Bill. Here's how we plan to do that.

 

First, we're already busy contacting up to five million activists nationwide through mail, phones and email to generate petitions to the U.S. Congress demanding action on Ron Paul's Audit the Fed Bill.

 

But that's just the beginning. We'll work the talk radio stations and grant local media interviews to ratchet up the pressure even further on Congress.

 

And a few days before the vote, if we have the resources, we'd also like to run hard-hitting targeted radio, TV and newspaper ads.

 

This entire program is designed to send this one, CLEAR message to Congress: Any politician who votes against the Federal Reserve Audit should look for another job.

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Guest Marbled Times

The Federal Reserve still refuses to show us where our money actually is (other than buying treasuries, which is also hidden). Americans want to know who accesses our money. Its that simple

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Guest Penta

2nd annual

End The Fed

Federal Reserve Building

20th St NW & Constitution Ave NW

Washington, DC 20001

302-670-7198

 

"On the night of November 22, 1910, a group of newspaper reporters stood disconsolately in the railway station at Hoboken, New Jersey. They had just watched a delegation of the nation's leading financiers leave the station on a secret mission. It would be years before they discovered what that mission was, and even then they would not understand that the history of the United States underwent a drastic change after that night in Hoboken." From 'Secrets of the Federal Reserve', by Eustace Mullins.

 

Come join us this Sunday, November 22 2009

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Guest Widow's Son

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCcyLYFW_bK0&pos=5

 

Former Federal Reserve Governor Randall Kroszner said a measure in Congress to subject the central bank’s monetary policy to audits would limit its independence and ability to control inflation.

 

“It would really be a shame to lose the benefits of Fed independence,” Kroszner, 47, said today in an interview on Bloomberg Radio. “It was really kind of the genius of the Congress that they structured it be independent of short-term congressional pressures but still accountable to the Congress.”

 

The House Financial Services Committee advanced a proposal last week requiring audits of monetary policy by the Government Accountability Office. The bill is sponsored by Representative Ron Paul, a Republican from Texas. Fed Chairman Ben S. Bernanke has opposed Paul’s proposal.

 

“If you had more political pressure from the GAO being able to audit any decision the monetary authority was making, a congressman perhaps the day before the decision saying I think they are going to keep rates up, I really think that’s a real problem,” said Kroszner, a professor of economics at the University of Chicago who served as a Fed governor from March 2006 to January 2009.

 

Paul, who wrote a best-selling book this year titled “End the Fed,” said provisions in his amendment would limit interference in monetary policy. The measure, co-sponsored by Representative Alan Grayson, a Democrat from Florida, would exclude any unreleased transcripts or minutes of Fed policy meetings. It calls for an audit of the Fed and its 12 regional banks by the GAO within a year after enactment.

 

Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee and opposed the Paul measure, said the issue “may be revisited” when the legislation reaches the House floor.

 

Declining Inflation

 

Kroszner said other nations have followed the example of the U.S. by insulating their central banks from interference by politicians, with the result that inflation rates have fallen around the world.

 

“We’ve seen much better inflation performance in other countries in the last 25 years as they’ve moved toward greater independence, using the Fed as the shining example of that,” he said.

 

Proposals to increase the Fed’s supervisory responsibilities over banks should be matched by an expansion of the central bank’s authority, Kroszner said.

 

“If the Congress chooses to give greater responsibility to the Fed for broader surveillance, it has to make sure to balance that with appropriate authority,” he said. “You can’t make someone responsible but not give them the tools necessary to do the supervision.”

 

Council of Regulators

 

The Obama administration has proposed making the Fed the regulator of large companies whose leverage and complexity threaten the financial system. The White House has also called for a council of regulators to monitor the economy for systemic risks and for the Treasury to decide if a company has grown so risky that it should be wound down.

 

“It’s very important to make sure that there’s good communication between the Federal Reserve and other regulators to make sure that the Fed is fully informed about what may be happening in other parts of the financial system,” Kroszner said.

 

(In the U.S., hear Bloomberg Radio on satellite radio: Sirius Channel 130 and XM Channel 129. In New York City, tune to WBBR 1130 on the AM dial.)

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Guest Congressman Alan Grayson

Congressman Alan Grayson successfully steered an important bipartisan amendment through the House Financial Services Committee today. The Paul-Grayson amendment clears the way for the first independent audit of the Federal Reserve since the central bank was created in 1913.

 

Congressman Grayson said, "The Federal Reserve has conducted secret bailouts that range in the hundreds of billions of dollars. Congress never voted on them, and the President never approved them. This cannot go on any longer. It's bad enough that we have bailouts at all. But it is really bad if they are secret, with the Fed transferring money to banks without the public knowing about it."

 

The amendment will be part of a larger bill aimed at reforming and regulating the financial markets, in order to prevent another massive collapse. Exposing how the Federal Reserve operates is a crucial component to any meaningful reform. "We need to figure out what they've done and then we can figure out how to respond," Congressman Grayson said.

 

The non-partisan Government Accountability Office will conduct the audits. The Paul-Grayson amendment closely mimics H.R. 1207, the Audit the Fed bill. Representative Ron Paul first introduced the idea of auditing the Fed 26 years ago. It never garnered much support until this year, when Congressman Grayson became the first Democrat to co-sponsor H.R. 1207. He literally walked it around the floor of the House during votes, encouraging Members to support it. The bill now has 310 co-sponsors out of the 435 Members, including well over 100 Democrats and every single Republican.

 

The amendment passed the Committee by a vote of 43-26. You can read the entire Paul-Grayson amendment here.

 

http://grayson.house.gov/Paul-Grayson%20amendment%20text.pdf

 

"I did not support this because it is a Democratic bill or a Republican bill, I supported it because Ron Paul is right," Congressman Grayson said.

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Guest MakeAWish

It's time for our congress to take back control from this quazi government that is dictating policy and undermining our democracy.

 

The Congress should mandate an audit. The Federal Reserve has become a rogue institution that needs to be brought under control or dismantled entirely. It is hurting our country not helping it.

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Guest John Browne

The overabundance of fiat currency risks America suffering the scourge of inflation and recession simultaneously. Abject suffering will occur if central bank abuse is not halted.

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Guest Bill H.

Gold is now $1,167 per ounce. Both "great depressions" were on the federal reserve's watch. Now I am just waiting for the dollar to hyper-inflate into oblivion. Go see Michael Moore's documentary, "Capitalism: A Love Story."

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Guest Dirt Farmer

The Fed is a banking cartel, allowing the money center banks to create money out of thin air, and then charge interest on it. Is it any wonder that the bankers don't want their counterfeiting operation to be audited?

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Guest Fedup

The Fed is starting to really feel the heat on this issue.

 

==========================================================

 

The Federal Reserve Board on Wednesday announced revisions to the policy governing eligibility, qualifications, and rotation for directors of Federal Reserve Banks and their Branches. The revisions address situations where, as a result of a company changing character, affiliations and stockholdings that were previously permissible may become impermissible for Class B and Class C directors.

 

Each Federal Reserve Bank has a nine-member board of directors. Commercial banks that are members of the Federal Reserve System (member banks) elect three Class A and three Class B directors, and the Board of Governors appoints three Class C directors. As required by the Federal Reserve Act, Class A directors of each Reserve Bank represent the member banks within the Federal Reserve District. Class B and Class C directors represent the public and may not be officers, directors, or employees of any bank. In addition, Class C directors may not be stockholders of any bank. The Board has by policy extended these prohibitions on affiliations and stockholdings to encompass bank holding companies and other financially-related entities to ensure that Reserve Bank boards reflect an appropriate cross-section of industry and the public. The policy refers to these entities as "financial affiliation companies" and "financial stock issuers," respectively.

 

The revised policy provides that if a Class B or Class C director is affiliated with a company that becomes a financial affiliation company during his or her term, the director must either resign from the impermissible affiliation or resign from the Reserve Bank’s board within 60 days of the earlier of the date that the director becomes aware of the prohibited affiliation or the Board informs the Reserve Bank of the change in character of the company. During this time, the director would be required to recuse himself or herself from all duties related to service as a Reserve Bank director until the affiliation is severed.

 

A Class C director who holds stock in a company that becomes a financial stock issuer during the course of the director's term must divest the impermissible stock or resign from the Reserve Bank's board within 60 days of the earlier of the date that the director becomes aware of the prohibited nature of the company or the Board informs the Reserve Bank of the company's status as a financial stock issuer. Until the stock is divested, the Class C director would be required to recuse himself or herself from Reserve Bank director duties and would not be allowed to purchase additional stock in the relevant company while remaining on the Reserve Bank board.

 

The revised policy also addresses Class C directors' indirect holdings in financial stock issuers and the eligibility rules that apply to directors of Reserve Bank Branches.

 

http://www.federalreserve.gov/newsevents/press/other/20091125a.htm

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Guest Fedup

The Board's new policy

 

======================

 

DIRECTORS – ELIGIBILITY, QUALIFICATIONS, AND ROTATION

 

The Board expects the directors of the Federal Reserve Banks and

their branches to be individuals who can contribute to the System’s

understanding of the economic conditions of their district and the effect of

these conditions on the economy as a whole. Accordingly, directors should

be familiar with the economic and business community of the territory for

which they are selected. In addition, directors should be respected in their

community and able to meet their financial obligations. Candidates should

be selected who will represent the interests statutorily designated for their

class. No member of Congress or of the Board’s Federal Advisory Council

or Thrift Institutions Advisory Council or the Consumer Advisory Council

may simultaneously be a director of a Reserve Bank.

 

Directors will be selected without discrimination on the basis of race,

creed, color, sex, or national origin. In light of the powers and

responsibilities of the System’s directors, the Board will only consider

candidates for its appointments who are citizens of the United States,

including naturalized citizens. The Board recommends that each Reserve

Bank adopt a similar policy for Class A and Class B directors. The branch

regulation requires that branch directors be United States citizens.

 

In nominating or selecting candidates for directors, each Reserve

Bank and the Board should be mindful that a minimum of three directors on

each Reserve Bank board will serve on the Reserve Bank’s audit committee.

Accordingly, each board must have at least three directors who are suited to

fulfill the responsibilities of the audit committee.1 These directors should be

independent2 and financially literate (i.e., able to understand financial

statements and general financial concepts). At least one member should

have banking, accounting, or other relevant financial proficiency.

 

http://www.federalreserve.gov/newsevents/press/other/other20091125a1.pdf

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Guest Fedup

Class A

 

By statute, Class A directors are nominated and elected by the

member banks in each Federal Reserve district to represent the stockholding

banks. There are few statutory or policy restrictions on eligibility for

nomination to Class A beyond the general requirements discussed above.

Class A directors may, for example, be officers or directors of a member or

non-member commercial bank. If the nominee is an officer or director of a

bank, he or she may serve as a Class A director only if nominated and

elected by member banks in the same classification group as such person’s

bank (as discussed in FRAM 1-064, Procedure for Elections of Class A and

Class B Directors). An officer or director of more than one bank is

considered to be affiliated with the largest bank of these banks for purposes

of this provision.

 

1 The qualifications for members of the audit committee are described in FRAM 1-007

(S-2622).

 

2 Members of the audit committee are considered to be independent if they have no

relationship with the Reserve Bank that might interfere with the exercise of their

independence from management of the Bank.

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Guest Fedup

Class B

 

Class B directors also are nominated and elected by the member banks

in each Federal Reserve district. Class B directors represent the public and

“shall be elected . . . with due but not exclusive consideration to the interests

of agriculture, commerce, industry, services, labor, and consumers." By statute, no Class B director may be an officer, director or employee of any bank.

 

In order to give full effect to this requirement as well as the

requirement that Class B directors be elected with consideration for sectors

of the economy beyond banking, under the Board’s policy a Class B director

may not be an officer, director (including advisory director) or employee4 of

a financial affiliation company. A financial affiliation company is any

bank,5 bank holding company, branch or agency of a foreign bank, thrift

institution, credit union, or subsidiary of any such company or entity. A

financial affiliation company also includes any company that owns a bank or

thrift institution, even if the company is not a registered bank holding

company, if, at the time of election, the value of all banks and thrifts

controlled by the company constitutes 15% or more of the assets, revenues,

or net income of the consolidated holding company. A Class B director who

is affiliated with a company that owns a bank or thrift institution (but that is

not a financial affiliation company as defined above) should be selected

because of the individual’s connection with the nondepository activities of

the company.

 

If a Class B director has an affiliation with a company that is not a

financial affiliation company at the start of his or her service as a director of

the Reserve Bank but that becomes a financial affiliation company during

the Class B director’s term, the Class B director must either resign from the

impermissible affiliation or resign from the Reserve Bank’s board within 60

days of the earlier of the date the director becomes aware of the

impermissible affiliation or the date that the Board informs the Reserve

Bank that the company has become a financial affiliation company. During

this 60-day period (or until the affiliation is severed, if sooner), the Class B

director shall recuse himself or herself from all duties related to service as a

Reserve Bank director. Although the Class B director has 60 days to resign

from the impermissible affiliation or from the Reserve Bank board, the

Class B director should advise the Reserve Bank of his or her intentions

within 30 days of notification of the company’s status as a financial

affiliation company.

 

If a company becomes a financial affiliation company after the

Class B director’s election to a term that has not yet commenced, the Class B

director may not begin service until he or she has resigned from the

impermissible affiliation.

 

The term "employee" covers an individual who serves, at a minimum, as a common

law employee of the relevant company. This would include any contractor for whom the

employing entity should withhold federal income taxes. It would not include, however,

an individual who works as a professional consultant and who has a bank or bank holding

company, or an affiliate of such, as a client, unless the relationship is so close as to give

rise to common law employee status.

 

For purposes of this policy, a “bank” includes any entity eligible for membership in the

Federal Reserve System, including a national bank, a savings bank, a Morris Plan bank,

and an industrial loan company.

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Guest Fedup

Class C

 

By statute, Class C directors are appointed by the Board of Governors

to represent the public, and, like Class B directors, are selected with “due but

not exclusive consideration to the interests of agriculture, commerce,

industry, services, labor and consumers.” By statute, candidates for Class C

directors must have been residents of their district for at least two years.

Because the Board selects the chairman and deputy chairman of the board of

directors from among the Class C directors, each Class C director should

have proven leadership credentials. The Federal Reserve Act provides that

the chairman be a person of “tested banking experience.” Over the years,

this requirement has come to be interpreted as requiring familiarity with

banking or financial services.

 

Affiliations

 

The eligibility limitations applicable to Class B directors also apply to

Class C directors. Accordingly, no Class C director may be an officer,

director, advisory director, or employee of a financial affiliation company.

If a Class C director has an affiliation with a company that is not a

financial affiliation company at the start of his or her service as a director of

the Reserve Bank but that becomes a financial affiliation company during

the Class C director’s term, the Class C director must either resign from the

impermissible affiliation or resign from the Reserve Bank’s board within 60

days of the earlier of the date the director becomes aware of the

impermissible affiliation or the date that the Board informs the Reserve

Bank that the company has become a financial affiliation company. During

this 60-day period (or until the affiliation is severed, if sooner), the Class C

director shall recuse himself or herself from all duties related to service as a

Reserve Bank director. Although the Class C director has 60 days to resign

from the impermissible affiliation or from the Reserve Bank board, the Class

C director should advise the Reserve Bank of his or her intentions within 30

days of notification of the company’s status as a financial affiliation

company.

 

If a company becomes a financial affiliation company after the

Class C director’s election to a term that has not yet commenced, the Class C

director may not begin service until he or she has resigned from the

impermissible affiliation.

 

Stockholdings

 

By statute, no Class C director may be a stockholder of any bank. In

addition, to give effect to this prohibition, it is the Board’s policy that no

Class C director may own stock in a bank holding company, foreign bank,

subsidiary of a bank holding company, or operating subsidiary of a bank

(collectively, together with banks, referred to as “financial stock issuers”).

If a Class C director holds stock in a company that becomes a financial stock

issuer during the course of the Class C director’s term, the Class C director

must divest the impermissible stock or resign from the Reserve Bank’s board

within 60 days of the earlier of the date the director becomes aware of the

impermissible stockholding or the date that the Board informs the Reserve

Bank of the company’s status as a financial stock issuer. Until the time of

complete divestiture or resignation, the Class C director shall recuse himself

or herself from all regular duties related to service as a Reserve Bank

director. In addition, the Class C director may not purchase any additional

stock in the relevant company until he or she resigns from the Reserve

Bank’s board.

 

Although the Class C director has 60 days to divest the impermissible

stock or resign from the Reserve Bank board, the Class C director should

advise the Reserve Bank of his or her intentions regarding divestiture or

resignation within 30 days of notification of the company’s status as a

financial stock issuer.

 

Indirect interests in financial stock issuers. Class C directors are not

disqualified by virtue of indirect ownership interests in financial stock

issuers through limited types of widely held, diversified investment vehicles.

In particular, Class C directors may hold interests in financial stock issuers

through ownership of shares of a mutual fund so long as the mutual fund is

registered under the Investment Company Act of 1940 and does not have a

stated policy of concentrating in the financial services sector. Class C

directors also may own shares of financial stock issuers through other

diversified investment funds. For these purposes an “investment fund”

means a mutual fund, common trust fund of a bank, pension or deferred

compensation plan, or any other investment fund which is widely held (i.e.,

more than 100 participants) and where the director has no ability to exercise

control over the fund’s investment decisions. “Diversified” means that the

fund holds no more than 5% of the value of its portfolio in the stock of any

one financial stock issuer, and no more than 20% in the financial sector.

 

Class C directors may not hold other indirect interests in financial

stock issuers, e.g., through a trust, limited partnership, or other investment

vehicle, unless the Board has determined that the interests are not so direct

or substantial as to be disqualifying. In making this determination, the

Board will consider various relevant factors including: (1) the nature of the

director’s ownership interest in the financial stock issuer (e.g., as grantor,

trustee, beneficiary, or partner); (2) the director’s role, if any, in the fund’s

investment decisions; (3) the size of the director’s proportional interest in the

financial stock issuer; and (4) the fund’s investment strategy and the

composition of its assets.

 

A candidate for Class C directorship must divest prohibited interests

(including interests in companies that become financial stock issuers after

the director’s appointment to a term that has not yet commenced) before

taking office. Divestiture should normally be accomplished by sale or

transfer of the stock to a person other than the director's spouse or minor

child. If after taking office a Class C director acquires a prohibited interest

by inheritance or other method not initiated by the director, that interest must

be divested within 60 days.

 

Ownership of stock by a spouse or minor child that would be

impermissible if owned by a Class C director, though not expressly

attributed to the director or prohibited by the Federal Reserve Act, is one of

many factors the Board weighs in assessing an individual's eligibility for

Class C. In addressing this factor, the Board will consider the number of

shares and percentage owned, the method of acquisition, the period of time

the shares have been held, the prominence and location of the financial stock

issuer, and any other factors that bear on the likelihood of public association

of the director or director candidate with the financial stock issuer. In

addition, the nature and extent of a candidate's involvement with such an

investment (e.g., through management or investment advice), may affect an

individual's eligibility for service. Finally, a Class C director should not

encourage or participate in the purchase of stock by or for his or her spouse

or minor child if ownership of that stock would be impermissible for the

director.

 

A director whose spouse or minor child owns shares of a bank or bank

holding company may be prohibited by federal statute from acting on certain

matters affecting the bank or bank holding company, so he or she should

seek guidance from the Reserve Bank's general counsel before participating

in such matters.

 

Branch Directors

 

Branch directors appointed by the Board must satisfy the same

eligibility requirements that pertain to Class C directors, except that the

Board may appoint a shareholder or advisory director of a commercial bank

or other financial affiliation company to serve as a branch director. The

Board may, in extenuating circumstances and at the request of a Reserve

Bank, waive this restriction and appoint one director of a commercial bank

as a branch director. Branch directors appointed by Reserve Banks may

satisfy the eligibility requirements of either Class A or Class B directors.

Accordingly, directors of commercial banks are eligible to serve as Reserve

Bank-appointed branch directors. No director of a Federal Reserve Bank

may serve simultaneously as a branch director.

 

Rotation Policy

 

Head-office directors. In appointing Class C directors of Federal

Reserve Banks, the Board has a policy of rotation, under which the service

of an individual as a director has been limited to two full terms. The Board

believes that the advantages of rotation among Federal Reserve Bank

directors outweigh any disadvantages and that any steps that banks might

take toward making the rotation principle more generally applicable in the

election of Class A and Class B directors should be encouraged as far as

possible. In accordance with this policy, Class C directors will not be

reappointed if they have served two full terms of three years each, or if, by

the end of the new term, the individual would have served as a director

(including all service as a Class A, B, or C director) for more than seven

years of continuous service. The Board has the authority to grant exceptions

where appropriate, but would expect to do so only in limited circumstances.

The chairman and deputy chairman of each Reserve Bank are

designated annually by the Board of Governors for terms running from

January 1 through December 31. Normally, a Class C director designated as

chairman may serve in that capacity for a total of up to three years.

Branch directors. The Board will follow a similar rotation policy

with Board-appointed branch directors and will generally limit such service

to a maximum of seven years of continuous service at the branch. It should

be noted, however, that service as a branch director does not count as service

at a head office and branch directors may be appointed to directorships at

head offices without regard to their tenure as branch directors. The Board

encourages the Reserve Banks to apply a similar rotation policy for branch

directors appointed by the Banks.

Waivers

 

In rare and exigent circumstances, the Board may approve a request

from a Reserve Bank for a waiver to this policy to permit a director,

director-elect, or candidate to continue to be eligible to serve as a director.

The Reserve Bank may submit a written request to the Board describing the

need for the waiver upon a vote of the board of directors on whether to

recommend a waiver from the Board. The Board must approve the Reserve

Bank’s waiver request in order for it to become effective.

 

As noted above, a Class C director may not deliberately acquire prohibited interests

after taking office.

 

Certain provisions of the Federal ethics laws apply to directors of Federal Reserve

Banks and branches as well as to Board and Reserve Bank employees. In general, these

provisions prohibit a covered person from participating in any particular matter in which

the person or certain persons related by family or business have a financial interest. 18

U.S.C. 208.

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Guest Where is the Change

Senator Bernie Sanders on Wednesday placed a hold on the nomination of Ben Bernanke for a second term as chairman of the Federal Reserve. "The American people overwhelmingly voted last year for a change in our national priorities to put the interests of ordinary people ahead of the greed of Wall Street and the wealthy few," Sanders said. "What the American people did not bargain for was another four years for one of the key architects of the Bush economy." As head of the central bank since 2006, Bernanke could have demanded that Wall Street provide adequate credit to small and medium-sized businesses to create decent-paying jobs in a productive economy, but he did not. He could have insisted that large bailed-out banks end the usurious practice of charging interest rates of 30 percent or more on credit cards, but he did not. He could have broken up too-big-to-fail financial institutions that took Federal Reserve assistance, but he did not. He could have revealed which banks took more than $2 trillion in taxpayer-backed secret loans, but he did not.

 

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Guest Simpson

There is a rumor going around financial circles that Mr. Bernanke and his international economic contacts are massively shorting gold to cover up fraud but they just can’t stop it. Gold will shed the light of transparency on the true value of our currency which in reality is extemely questionable and much weaker than anyone can imagine.

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