Govt dont know where the money gone

Alan Grayson (High Quality Version): Is Anyone Minding the Store at the Federal Reserve?
Financial Services Subcommittee on Oversight and Investigations hearing of May 5, 2009.
Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG does not know and is not tracking where this money is.

00:00
thank you very much mr. chairman
00:03
inspector Coleman you’re the inspector
00:05
general for the Federal Reserve right
00:07
okay that’s correct have you done any
00:10
investigations concerning the fellow
00:12
Reserve’s role in deciding not to save
00:14
Lehman Brothers which led to shockwaves
00:16
that went through the entire financial
00:18
system in that particular area you know
00:23
I don’t generally comment on specific
00:25
investigations but we do not currently
00:28
have an investigation in that particular
00:29
area all right what about the one
00:32
trillion dollars plus an expansion of
00:35
the throw Reserve’s balance sheet since
00:37
last September have you conducted any
00:39
investigations regarding that we right
00:43
now we have a it’s caught we call it a
00:46
review and so if you the term
00:49
investigation may have different
00:51
connotations so we’re actually
00:53
conducting a fairly high-level review of
00:56
the various lending facilities
00:58
collectively which would include you
01:01
know the towel a variety of the
01:03
different programs they’re in process
01:04
we’re looking at them at a fairly high
01:06
level to identify risk well I understand
01:09
that but we’re talking about events
01:11
that’s started unfolding eight months
01:12
ago have you reached any conclusions
01:14
about the Fed expanding its balance
01:17
sheet by over a trillion dollars since
01:18
last September we have not yet reached
01:20
any conclusions do you know who received
01:22
that money for the we’re in the process
01:29
right now of doing our review and right
01:33
but you’re the inspector general my
01:35
answer my question specifically is do
01:36
you know who received that one trillion
01:39
dollars plus that the Fed extended and
01:41
put on its balance sheet since last
01:43
September do you know the identity of
01:44
the recipients I do not know we have not
01:46
looked at that specific area at this
01:49
particular point on those reviews what
01:54
about Bloomberg’s report that there are
01:57
trillions of dollars in off balance
01:59
sheets transactions that the Federal
02:01
Reserve is entered into since last
02:03
September are you familiar with those
02:06
off-balance sheet transactions yeah I
02:09
think it may be
02:11
important at this point – just to bring
02:13
up a certain aspect related to our
02:16
jurisdiction and just to clarify perhaps
02:19
some of my earlier comments we are the
02:22
Inspector General for the board of
02:23
governors and we have direct oversight
02:26
over board programs and operations and
02:28
are also able to look at board delegated
02:30
function to the Reserve Banks as well as
02:33
its out the board’s oversight and
02:35
supervision of the Reserve Banks we do
02:38
not have jurisdiction to directly go out
02:40
and and audit Reserve Bank activities
02:43
specifically nevertheless in our lending
02:46
facilities project for example we are
02:48
looking at the the board’s oversight
02:51
over the program and to the extent that
02:55
extends out to the Federal Reserve Bank
02:56
of New York well I have a copy of the
02:59
inspector general act here in front of
03:01
me and it says among other things that
03:02
it’s your responsibility to conduct and
03:04
supervise audits and investigations
03:05
relating to the programs and operations
03:07
of your agency that’s correct so I’m
03:10
asking you if your agency has in fact
03:11
according to Bloomberg extended nine
03:13
trillion dollars in credit which by the
03:15
way works out to thirty thousand dollars
03:17
every single man woman and child in this
03:19
country I’d like to know if you’re not
03:22
responsible for investigating that who
03:24
is we actually we have responsibility
03:29
for the Federal Reserve’s programs and
03:32
operations audits to conduct audits and
03:35
investigations in that area in terms of
03:40
who’s responsible for investigating
03:42
would you mind repeating the question
03:44
one more time what have you done to
03:47
investigate the off-balance-sheet
03:49
transactions conducted by the Federal
03:51
Reserve which according to Bloomberg now
03:54
total nine trillion dollars in the last
03:57
eight months I’ll have to look
04:00
specifically at that Bloomberg article I
04:02
I’m not I I don’t know if I have
04:05
actually seen that particular one that’s
04:07
not the point the question is have you
04:09
done any investigation or auditing of
04:11
off-balance sheet transactions conducted
04:13
by the Federal Reserve at this point
04:16
we’re at the very rear conducting our
04:18
lending facility project at a fairly
04:19
high level in
04:20
not gotten to a specific level of detail
04:23
to really be in a position to respond to
04:25
your question have you conducted any
04:27
investigation or auditing of the losses
04:29
that the FEL Reserve is experienced on
04:32
its lending since last September we’re
04:36
still in the process of conducting that
04:38
review until we actually you know go out
04:40
and and gather the information I’m not
04:43
in a position to really respond to to
04:45
the specific question so are you telling
04:47
me that nobody at the thorough is
04:49
keeping track on a regular basis of the
04:51
losses that it occurs on what is now a
04:54
two trillion dollar portfolio I don’t
04:58
know if you’re telling me that there
05:00
you’re mentioning that there’s losses
05:02
I’m just saying we’re not until we
05:05
actually look at the program and have
05:07
the information we are not in a position
05:09
to say whether there are losses or to
05:12
respond in any other way to that mr.
05:15
chairman my time is up but I have to
05:17
tell you honestly I am shocked to find
05:18
out that nobody at the fair reserve
05:20
including inspector general is keeping
05:22
track of this

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