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Federal Reserve Act

This act established the Federal Reserve system, the central banking authority in the United States. It also requires that the chair of the Federal Reserve testify semiannually to Congress on the monetary policy.

Excerpts:

Official Title

An Act To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.

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Section 2A. Monetary policy objectives

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

Section 2B. Appearances Before and Reports to the Congress

(a) Appearances Before The Congress.

  1. In General. The Chairman of the Board shall appear before the Congress at semi-annual hearings, as specified in paragraph (2), regarding--
    1. the efforts, activities, objectives and plans of the Board and the Federal Open Market Committee with respect to the conduct of monetary policy; and
    2. economic developments and prospects for the future described in the report required in subsection (b).
  2. Schedule. The Chairman of the Board shall appear--
    1. before the Committee on Banking and Financial Services of the House of Representatives on or about February 20 of even numbered calendar years and on or about July 20 of odd numbered calendar years;
    2. before the Committee on Banking, Housing, and Urban Affairs of the Senate on or about July 20 of even numbered calendar years and on or about February 20 of odd numbered calendar years; and
    3. before either Committee referred to in subparagraph (A) or (B), upon request, following the scheduled appearance of the Chairman before the other Committee under subparagraph (A) or (B).

[12 USC 225b. As added by act of Dec. 27, 2000 (114 Stat. 3028).]

(b) Congressional Report. The Board shall, concurrent with each semi-annual hearing required by this section, submit a written report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking and Financial Services of the House of Representatives, containing a discussion of the conduct of monetary policy and economic developments and prospects for the future, taking into account past and prospective developments in employment, unemployment, production,investment, real income, productivity, exchange rates, international trade and payments, and prices.

[12 USC 225b. As added by act of Dec. 27, 2000 (114 Stat. 3028).]

(c) Public Access To Information. The Board shall place on its home Internet website, a link entitled 'Audit', which shall link to a webpage that shall serve as a repository of information made available to the public for a reasonable period of time, not less than 6 months following the date of release of the relevant information, including--

  1. the reports prepared by the Comptroller General under section 714 of title 31, United States Code;
  2. the annual financial statements prepared by an independent auditor for the Board in accordance with section 11B;
  3. the reports to the Committee on Banking, Housing, and Urban Affairs of the Senate required under section 13(3) (relating to emergency lending authority); and
  4. such other information as the Board reasonably believes is necessary or helpful to the public in understanding the accounting, financial reporting, and internal controls of the Board and the Federal reserve banks.

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