House Financial Services Subcommittee Reviews Proposals to Reform the Fed

The House Financial Services Subcommittee on Monetary Policy and Trade reviewed legislative proposals that were intended to bring "greater accountability and transparency to the Federal Reserve."

Witnesses asserted that: (i) history shows that when the Federal Reserve System (the "Fed") follows a rules-based approach to monetary policy, the economy performs better; (ii) requiring the Fed to explain the differences between a reference rule and its chosen monetary policy instead of constraining the Fed's policy choices would increase transparency; (iii) the Federal Reserve has continued to expand its authority and power beyond its original legislative authority in the wake of the Dodd-Frank Act's passage.

The following witnesses testified:

• Dr. John Taylor, Professor of Economics, Stanford University

• Dr. John Cochrane, Senior Fellow, Hoover Institution

• Dr. Donald Kohn, Senior Fellow of Economic Studies, Brookings Institution

• Dr. Paul Kupiec, Resident Scholar, American Enterprise Institute

See: Webcast of Hearing; Committee on Financial Services ("FSC") Memorandum; FSC Press Release.