This is the Cato Daily Podcast for Monday, June 29, 2009.

I'm Caleb Brown.

Should the U.S. audit the Federal Reserve's policies?

Is there a bigger issue at hand?

Bert Eley has a problem with the Fed's ability to extend credit to the private sector,

at least without congressional approval.

Eley is an adjunct scholar at the Cato Institute and a principal of Eelian Company Incorporated.

We spoke at the Cato event bringing transparency to the Federal Reserve held June 24th.

Ron Paul wants to audit the Fed.

His legislation, as he puts it, is aimed at merely opening the books at the

Fed, but you say that there's another issue there that ought to be contended with and I presume you mean it to be a bigger issue

than merely getting access to the books at the Fed.

Yes now first of all what Ron's audit is effectively is a policy audit.

There in fact is an audit of the Fed's finances.

There are no secrets in that regard.

What he really wants to do is to get have more public disclosure with regard to fed policies,

the formulation of them, who they lend to the terms of lending and other policy considerations.

So I characterize it as a policy audit rather than a typical financial audit,

which is what most people think of when they hear the word audit.

My concerns, the issue of the Jure, is the extent to which the Fed, along with the Treasury

Department, are extending private credit to the private sector.

And so I pose it as three policy questions.

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