Panel likely to OK new rules for Fed
Thursday, July 6th 2000, 12:00 am
By: News On 6
WASHINGTON â€“ The Senate Banking Committee is expected to approve legislation next week to modify how often the Federal Reserve chairman testifies before Congress about monetary policy.
The committee is scheduled to vote on the Federal Reserve Reporting Act of 2000 at a July 13 hearing. Banking Committee Chairman Phil Gramm, a Texas Republican, has said the measure enjoys support from the Fed as well as members of the House and Senate banking committees.
Mr. Gramm's bill sets a new procedure for the Fed chairman to testify on monetary policy following expiration of the so-called Humphrey-Hawkins reporting requirements.
Since 1978, the Humphrey-Hawkins testimony compelled the Fed to appear before the House and Senate banking committees to discuss monetary policy. Financial markets have often soared or plunged based on comments by Chairman Alan Greenspan.
Under Mr. Gramm's bill, the Fed chief would be required to appear twice a year in Congress â€“ once each before the Senate and House banking panels. Each chairman could request a second appearance, meaning that the Fed chief could testify on monetary policy four times a year, the same as past practice.
Specifically, the bill says the Fed chief will appear before the House Banking Committee "on or about Feb. 20 of even-numbered calendar years, and on or about July 20 of odd-numbered calendar years." The Fed chairman's Senate appearance will be "on or about July 20 of even-numbered calendar years and on or about Feb. 20 of odd-numbered calendar years."
With each hearing, the Fed will issue a written report to both committees "containing a discussion of the conduct of monetary policy and economic developments and prospects for the future," according to the bill.