US Senate Votes 96-0 to Audit Federal Reserve  

I thought the mini-crash on the markets last week was interesting, especially given that the initial "fat fingered trader" hypothesis turned out to be nothing more than a rumour. In the aftermath, some fingers got pointed at a plan for auditing the Federal Reserve as a cause for the event, though a watered down (one off only audit) bill seems to have now been passed - Senate Votes 96-0 to Audit Federal Reserve.

The Senate voted 96 to 0 on Tuesday to authorize a congressional audit of the secretive Federal Reserve Board’s emergency aid program and full disclosure of who got the money, a plan that could reveal more details about government help for embattled investment firm Goldman Sachs.

Under the plan, Congress’ Government Accountability Office would conduct a top-to-bottom audit of all the Federal Reserve’s emergency activities since the economic crisis began in December 2007. The Fed also would have to post on its website all recipients of money from the more than $2 trillion in emergency aid that’s been disbursed since then.

The GAO also would look into whether the financial deals involved conflicts of interest. It’s common for members of the board of directors of the powerful Federal Reserve Bank of New York, for example, also to be executives or directors of banks that got government bailout money.

The Fed also is locked in a court fight over a Freedom of Information Act suit to force it to identify all institutions that secretly got rescue money.

The White House and Fed Chairman Ben S. Bernanke had opposed the Fed audit but relented after two concessions were made: It will be done only once and the list of funding recipients won’t appear on the Internet until Dec. 1, rather than 30 days after enactment.

The vote Tuesday was on an amendment to a financial overhaul package making its way through the Senate.