WASHINGTON -- Federal Reserve officials plan a special meeting Monday to discuss the handling of public requests for access to transcripts of future meetings held by the Federal Open Market Committee, a senior Fed official said yesterday.
The special meeting of the FOMC will preceded the panel's regular meeting Tuesday to review monetary policy, the official said.
Fed officials are under continuing pressure from House Banking Committee Chairman Henry Gonzalez, D-Tex., to release full transcripts of the FOMC meetings, a demand that board Chairman Alan Greenspan rejected in a recent letter to Gonzalez.
In addition, at least 10 news organizations and individuals have submitted requests to the Fed under the Freedom of Information Act for copies of the FOMC transcripts, which date back to 1976. Those asking for the information include The Bond Buyer and American Banker, a sister publication.
The issue of public access to the transcripts is of little or no direct interest to the bond market if the information is dated, said L. Douglas Lee, chief economist for County NatWest USA.
However, Lee suggested, the ongoing dispute between the Fed and Gonzalez could complicate the central bank's ability to set monetary policy by stirring controversy with members of Congress at a delicate time for policymakers.
The bond market is looking for the Fed to start raising short-term rates next year, even though inflation remains low. Moreover, Greenspan and his colleagues are at odds with the Clinton Administration and members of Congress over plans to consolidate bank regulatory agencies.
At their Nov. 15 meeting, FOMC members decided to release scrubbed and edited transcripts of committee meetings, with a five-year lag. Under this plan, Greenspan told Gonzalez, the minutes will purge "confidential information obtained from or about individuals, businesses, and foreign central banks." At the same time, Greenspan pledged that any editing "will eliminate no element of substance."
The edited transcripts of the 1988 meetings are to be released "early next year," Greenspan said. After that, the plan calls for releasing transcripts of discussions in earlier years back to 1976, when the committee began recording the official discussions.
The process is expected to take several years to complete. Moreover, under the five-year lag policy, minutes of committee meetings this year would not be available until 1998.
The issue at Monday's special meeting of the FOMC will be to determine how to deal with transcripts of future meetings, the senior Fed official said. Greenspan has argued in congressional testimony that a verbatim record of the meetings could inhibit free-wheeling discussions among FOMC members in setting monetary policy.
Gonzalez has rejected the idea of releasing the minutes over time, calling the five-year time lag "arbitrary and without any rational basis."
There is evidence that Fed officials themselves believe a five-year lag will not stand up under current law. In notes of an FOMC conference call on Oct. 15 that were released by Gonzalez to reporters, Virgil Mattingly, the Fed's general counsel, said chances are not good of withholding material more than three years old.
Greenspan himself agreed that the Fed might have to adhere to a three-year standard to qualify for an exemption under the Freedom of Information Act that allows federal agencies to withhold records of internal discussions for "deliberative" purposes.
Fed officials also acknowledged at the November meeting that the Clinton Administration has urged federal agencies to be as open as possible in responding to FOIA requests. The policy shifts the burden to the agencies to demonstrate that they qualify for an exemption under the law, Mattingly suggested.