Victoria McGrane and Jon Hilsenrath write in The Wall Street Journal:
The Federal Reserve has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system….
Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. In the process it is reshaping the U.S. financial industry by directing banks on…what kind of trading they can engage in and what kind of fees they can charge retailers on debit-card transactions.
It’s hard to have such arrogance when the public is listening in.
But some would disagree with the secretiveness. Sheila Bair, ex-Chairwoman of the FDIC, suggests
People have a right to know and hear the discussion and hear the presentations and the reasoning for these rules. All of the other agencies which are governed by boards or commissions propose and approve these rules in public meetings. I think it would be in the Fed’s interest to do so as well.
Naturally, the Fed insists that there’s nothing wrong with the secrecy. Fed Governor Daniel Tarullo says with a straight face that open meetings aren’t always the most effective means to increasing public understanding, and they aren’t a gauge of regulators’ work.
You can have a scripted meeting that does not show any engagement at all….
But this is just a red herring. Scripting is a hazard of all public meetings, not only the Fed’s. But more to the real point, this argument elides the fact that there’s no increase in public understanding, either, from secret meetings, nor do such closed-door meetings provide any gauge at all of regulators’ work.
Open meetings could also strain the already busy schedules of top Fed officials. The Fed currently has 250 separate rule-writing projects under way.
There’s a hint there, and it has to do with all those regulations and regulation-writing exercises.
For whom do these guys think they work?