Statement by Jerry L. Jordan, President, Federal Reserve Bank of Cleveland, before the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, October 19, 1993.
Before I respond to the three specific questions raised in your letter of September 24, 1993, I would like to address a general issue that I believe is highly relevant.
The questions of what information to release and when to release it must be answered in the context of accountability for achieving clear, unambiguous objectives for monetary policy. If the FOMC is charged with conflicting or unattainable objectives, discussions about the appropriate timing and content of disclosure could easily reflect misplaced priorities. The Congress could best contribute to a clarification of the FOMC's policy direction by enacting the Neal Resolution, which specifies an ultimate goal of achieving the highest sustainable rate of real economic growth through the maintenance of purchasing power stability. The timing and content of disclosure become less contentious issues in the presence of a credible framework for monetary policy.
Markets operate more efficiently with knowledge of the collective thought process that generates Committee decisions. Such information allows people to deal with uncertainties about how policy actions might respond to unknowable future developments.
It takes some time to ensure members' agreement on an accurate portrayal of a meeting and to remove sensitive material. Thus, the minutes of a meeting, describing the climate and substance of Federal Open Market Committee decisionmaking, are released only after their formal acceptance, at the next regularly scheduled meeting.
Meeting minutes are released through an orderly process that guarantees equal access for everyone who wants to receive them, simultaneously, at numerous sites nationwide. In the interim before release, actions in the open market are taken in accordance with a publicly understood procedure. Within seconds of any market action, electronic information services communicate the facts nationwide.
As a member of the Committee, I find it objectionable to see news stories that are not written on the basis of the Committee's well-defined, orderly procedures for information security and release. I do not condone the actions of individuals who unilaterally release such information, even through inadvertence. Chairman Greenspan indicated last week that measures have been taken to ensure that the procedures adopted by the Committee are followed.
You have asked me to respond to three specific questions. First, I do not take notes at an FOMC meeting. At the first few meetings I attended in 1992, I took a few notes during Committee meetings to remind me later of issues raised in the course of discussion, but soon decided that I did not need notes to remind me of the important issues. If I want staff analyses of theoretical or empirical issues in preparation for subsequent meetings, I discuss the issues with senior policy advisers. All this is done in accordance with the Committee's standard rules for maintaining confidential FOMC information. We adhere to a "need to know" policy when relating information to research economists conducting studies on policy issues. Second, I have not questioned any other participants in FOMC meetings about the procedures they follow and consequently am not aware of whether they keep notes or records of the meetings. Finally, I have no information about the premature disclosure of FOMC meeting materials by anyone employed at the Federal Reserve.
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|Title Annotation:||Statements to the Congress|
|Publication:||Federal Reserve Bulletin|
|Date:||Dec 1, 1993|
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