Via Matt Yglesias, here's an important post from David Dayen that considers the deal to include an audit of the Federal Reserve in the financial-reform bill, the importance of said audit, and why Ron Paul is not the person to listen to on the issue -- mainly because Paul doesn't want to audit the Fed but destroy it. As Dayen notes, "The best-selling book 'End the Fed' that he wrote tipped me off to this."
The compromise crafted by Sen. Bernie Sanders to perform this audit is limited to a onetime release of data on all of the various emergency programs, facilities, and actions performed by the Fed during the crisis. However, one thing to remember is that the financial-reform bill, as well as modifying and restricting federal regulators' authorities to guarantee debt and shore up firms during a crisis, also makes a point of insisting on disclosures in the event that any emergency action is taken. Within seven days, Congress must be given the full details of any financial transaction. The Fed can choose to hide the identities of its counterparties if it feels revealing them would hamper the bank's efforts, but that automatically triggers an audit by the GAO to determine if that claim is reasonable.
All of which means that while the Fed audit amendment is limited to the actions surrounding the current crisis, any future responses will have disclosures, including a potential audit, built right in. That's still a bit limited for some proponents of auditing the central bank, but it does suggest that at least the Fed's most extraordinary actions will come under public scrutiny in the future.
-- Tim Fernholz