Congressman William Lacy Clay serves as ranking member of the subcommittee.
The complete jurisdiction of the subcommittee includes:
(i) financial aid to all sectors and elements within the economy;
(ii) economic growth and stabilization;
(iii) defense production matters as contained in the Defense Production Act of 1950, as amended;
(iv) domestic monetary policy, and agencies which directly or indirectly affect domestic monetary policy, including the effect of such policy and other financial actions on interest rates, the allocation of credit, and the structure and functioning of domestic financial institutions;
(v) coins, coinage, currency, and medals, including commemorative coins and medals, proof and mint sets and other special coins, the Coinage Act of 1965, gold and silver, including the coinage thereof (but not the par value of gold), gold medals, counterfeiting, currency de nominations and design, the distribution of coins, and the operations of the Bureau of the Mint and the Bureau of Engraving and Printing; and,
(vi) development of new or alternative forms of currency.
The Subcommittee plays an active role in the semi-annual Humphrey-Hawkins hearings at which the Committee receives the testimony of the Chairman of the Board of Governors of the Federal Reserve (Fed) about the state of economy and monetary policy. Recent hearings have focused on the Fed’s ongoing efforts to carry out its “dual mandate” of fostering stable prices and low inflation and maximizing employment, particularly in an economy that has lost over 8 million jobs in recent years, and on the Federal Reserve’s strategy for reducing and eliminating the extraordinary stimulus the Federal Reserve provided the economy during the financial crisis.
In the 111th Congress the subcommittee conducted oversight hearings about the state of U.S. coins and currency. In particular, the Subcommittee examined the roles the Bureau of Engraving and Printing, U.S. Mint, Federal Reserve and United States Secret Service play in managing the circulation of all U.S. coins and currency and in implementing anti-counterfeiting measures to safeguard the U.S. money supply. The Subcommittee examined the federal government’s response to the rising costs of precious metals used to manufacture coins.
The Subcommittee continues to provide regular oversight of the Federal Reserve’s efforts to carry on its regular responsibilities, including bank examinations, consumer protection and data collection and analysis under the Home Mortgage Disclosure Act (HMDA).
In addition to its regular responsibilities, in response to the severe economic crisis of the past few years the Federal Reserve used emergency powers granted to it under §13(3) of the Federal Reserve Act to support and stimulate the U.S. economy and to unfreeze credit. As part of these efforts, the Fed put into place a number of programs, including the Term Asset-Backed Securities Loan Facility (TALF) to support the secondary markets for mortgages, student loans and automobile loans, the Primary Dealer Credit Facility to provide liquidity to primary dealers and other programs. As the economy has recovered, most of these Fed emergency lending programs have been terminated. The Fed is still faced with the task of reducing its balance sheet (which currently stands at around $2 trillion). The Subcommittee oversaw the Fed’s efforts to withdraw the extraordinary monetary stimulus it provided and reduce its balance sheet in ways that do not spur inflation or harm the economy.
In 2009, the Subcommittee held hearings about the extent to which operations of the Fed should be transparent and subject to audit without political and other outside interference in the Fed’s authority to set monetary policy.
The Dodd-Frank Act (signed into law by President Obama in July 2010), which provides new powers to the Government Accountability Office to examine the Federal Reserve’s operations other than monetary policy, reflects the general consensus reached by the Subcommittee as a result of its hearings. The Fed audit language in the final version of the Dodd-Frank Act provides unprecedented transparency into all Federal Reserve operations and financial transactions (including emergency lending under section 13(3) of the Federal Reserve Act, financial statements and other Federal Reserve operations) except for core monetary policy deliberations and decision-making.
The Subcommittee on Domestic Monetary Policy and Technology and the Subcommittee on International Monetary Policy and Trade held a joint hearing to examine the sovereign debt crisis, particularly in Europe, as a result of the recent global recession. The U.S. and European governments, central banks and international financial institutions have been working to provide solutions to mitigate and alleviate the crisis, including loan guarantees from the International Monetary Fund and U.S. dollar liquidity swap facilities with European central banks. The joint hearing reviewed efforts to address the crisis and the two Subcommittees will continue to work together to provide ongoing oversight of other sovereign debt crises wherever they arise in the world.
Committee on Financial Services • B301C Rayburn House Office Building • Washington, DC 20515 • (202) 225-4247
Connect with us on Twitter: