Fed Needs Better Control of FOMC Minutes Release, Report Says
The Federal Reserve Board should strengthen its controls over how the minutes of policy makers’ meetings are handled, an audit report released today showed.
The central bank should take steps including developing procedures for “ensuring that only publicly available information is sent to the Congressional Liaison Office contact list” and limiting access to document types in its publication system, according to the report by the Fed’s Office of Inspector General on the central bank’s accidental leak of the minutes of the Federal Open Market Committee’s March 19-20 meeting.
Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) were among at least 15 financial companies that received potentially market-moving Fed information 19 hours before the public in an April release the central bank called a mistake.
Brian Gross, a member of the Fed’s congressional liaison staff, distributed the minutes of the FOMC’s March meeting at 2 p.m. Washington time on April 9. The distribution list also included congressional staff members and trade groups.
FOMC minutes, describing the committee’s discussions about the direction of monetary policy and its outlook for the economy, are among the most closely scrutinized Fed documents as the panel debates when to begin tapering its third round of bond purchases. The inadvertent release raised questions about the central bank’s internal controls among attorneys and disclosure experts.
The central bank is currently buying $85 billion in bonds each month to stoke growth and combat unemployment. Sixty-five percent of economists surveyed by Bloomberg Aug. 9-13 said the FOMC will probably begin tapering asset purchases at its Sept. 17-18 meeting.
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