Statement by Richard F. Syron, President, Federal Reserve Bank of Boston, before the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, October 19, 1993.

Thank you for this opportunity to share my views on maintaining a more extensive record of Federal Open Market Committee (FOMC) meetings.

Being involved in the making of monetary policy is a great honor and something in which I take deep personal pride. Thus, from a purely personal perspective, I might welcome my views and positions being made more public. However, the key issue to me is what will provide the best policy for the people of the United States and of the First District. I believe there are difficult trade-offs between openness and the effectiveness of the deliberations that lead to monetary policy. I would like to mention two specific reasons that contribute to this trade-off.

First, I am concerned that a highly detailed accounting of FOMC deliberations, unless its release were delayed several years, would impair the ability of the FOMC to obtain and discuss confidential information on individual companies and foreign central banks - information that is essential to conducting monetary policy.

New England's experience in the recent recession is a relevant case in point. The recession bepn earlier in New England, and proportionately many more jobs were lost in the region than in the rest of the country. As a consequence, some problems surfaced in New England before they emerged elsewhere.

For example, the difficulties experienced by New England banks contributed to a "credit crunch" for small and medium-sized businesses. These problems were discussed at FOMC meetings and helped shape policy. It would not have been possible to convey the seriousness of the banking problems in New England, the potential for reduced credit availability, and its impact on the economy as a whole without reference to individual borrowers and lenders. Yet to make such information public would have violated confidences; indeed, much information would never have been volunteered, and our understanding of the problems would have suffered greatly. Again, trade-offs are involved: The more specific are the references in the record of FOMC deliberations, the longer would be the time lag required before disclosure if access to valuable but confidential information on individual companies is to be maintained and used.

Second, much of the discussion and economic information disclosed in FOMC meetings pertains to the valuation of assets priced continuously in world financial markets. Fluctuations in asset values can have a significant impact on the jobs of workers and on the incomes of investors. Public disclosure of preliminary and exploratory FOMC discussions could generate unintended value changes that could lead to harmful reactions and unnecessary volatility in the economy.

In summary, the ultimate objective of monetary policy is to promote the highest standard of living possible for Americans. The policymaking process should be as open as it can be, without diminishing our ability to achieve that objective.

In regard to the three specific questions you posed, I generally take rough, handwritten notes at FOMC meetings; these notes are subsequently kept in a locked drawer. Any notes taken by the senior economist accompanying me are also kept securely or disposed of according to procedures governing confidential documents. Except for the Secretary's maintenance of Committee records, I have no direct information about how others may keep notes. I have no information about individuals imparting information about FOMC meetings before official release.