Federal Reserve Board Chairman Alan Greenspan issued a terse, five-paragraph rebuttal on Wednes-day to charges by Rep. Henry B. Gonzalez that the central bank lacks the legal authority to undertake foreign currency exchange operations.
Mr. Greenspan wrote that the Attorney General and the Treasury Department's general counsel concurred in a Fed legal opinion presented to Congress in 1962. The opinion held that the Federal Reserve Act gives the central bank the power to conduct exchange operations.
The Fed chairman also attacked the Texas Democrat's assertion that the central bank did not maintain an accurate accounting of its end-of-month foreign currency balances.
"I do not agree that there are 'substantial inconsistencies' in these data," Mr. Greenspan wrote. He added that he has offered on two occasions to have Fed staffers meet with Gonzalez' staff to reconcile differences.
Mr. Greenspan rejected the suggestion by Rep. Gonzalez, who chairs the House Banking Com-mittee, that the Fed directly notify the financial news wires of exchange operations. He said such notifications would reduce the central bank's effectiveness.
