McHenry, Barr Probe Federal Reserve Regional Banks’ Ties to Unaccountable Global Governance Organizations
Commentary by Steven Lofchie
Representatives Patrick McHenry and Andy Barr, Chair and member of the House Financial Services Committee asked the Presidents of two of the regional Federal Reserve Banks as to their involvement with international financial regulators and with officials of foreign governments.
In the letter addressed to Mary C. Daly, President of the Federal Reserve Bank of San Francisco, the Representatives asked about the FRBSF's participation in a "research workstreams with the Network for Greening the Financial System" ("NGFS"). Additionally, the letter asks about work that may have involved officials from China or Rusia.
In the letter addressed to John C. Williams, President of the Federal Reserve Bank of New York, the Representatives asked not only about NGFS, but also about work with the Bank of International Settlements and various committee of the BIS. As with the letter to Ms. Daly, the letter requested information about contacts with officials from China and Russia.
The legislators requested a response by February 16, 2024 from Ms Daly and by March 2 from Mr. Williams.
Commentary
The website for the NGFS states its core mission to include "mobiliz[ing] mainstream finance to support the transition toward a sustainable economy."
As to the Federal Reserve Board, it has five key missions: monetary policy, stability of the financial system, safety and soundness of banks, the payment system, and consumer protection. The FRB is given a significant degree of insulation from the ordinary political process on the view that it limits its role to those identified missions, and does not involve itself in matters of politics. Arguably, the FRB has expanded its activities to matters outside of its key missions, not limited to climate issues, an area as to which it seems to have devoted significant resources, at the same time that the bank regulators have witnessed very significant bank failures. This raises the questions of whether the bank regulators are appropriately focused.