To Shine More Light On Federal Reserve

[Karlis]

The Federal Reserve's longtime penchant for opacity is coming under fire from lawmakers demanding to know more about the central bank's role in the U.S. government's response to the financial crisis.

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Government auditors have a long-standing history of avoiding scrutiny of monetary policy decisions in order to retain the sense of independence so important to the Fed's credibility. But the role of the central bank as the key conduit for trillions in financing, as well as in facilitating the bailout of major financial firms, has led some to suggest more oversight should be expected.

"The whole thrust of securities law is that you have to fully inform investors," Grayson said. "You don't keep large transactions secret because people might find out about them."

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The outlook of the Paul bill is uncertain, but if support continues to grow it could force an up-or-down vote in the House. More broadly, the Fed's role in the U.S. regulatory system is in the process of being reviewed by the Obama administration and Congress as part of a larger revamp of the regulatory landscape.