WASHINGTON - Federal Reserve Board Chairman Alan Greenspan has rejected the suggestion of a top banking legislator that the Federal Open Market Committee videotape the closed-door meetings it holds to set monetary policy.
In October, House Banking Committee Chairman Henry B. Gonzalez, D-Tex., called on the Fed to begin videotaping the sessions, saying the agency "must shed its traditional policy of secrecy." Gonzalez suggested a tape be made available to the public 60 days after each meeting.
But in a Dec. 24 letter to Gonzalez, Greenspan said the Fed board and the Federal Reserve Bank presidents all agree that there are serious drawbacks to releasing at any time a literal record of FOMC deliberations - through videotaping or other means such as word-for-word transcripts."
Greenspan added that the free flow of ideas would be seriously impeded if the FOMC meetings were not allowed to remain private. "Members need to feel free to trade ideas, question assumptions, advance hypotheses, make projections, speculate on alternative policies and possible outcomes, and especially to change their views in response to the arguments of others," he said.
The Fed's current practice is to release an edited version of the minutes of each FOMC meeting on the Friday after the next meeting. Because the group meets eight times a year, the minutes typically surface in public about six weeks after each meeting.
In a letter dated Dec. 29, Gonzalez said he was disappointed with Greenspan's response and said he found it impossible to believe "that the views of all seven members of the Board of Governors and the 12 regional Federal Reserve presidents are contained in the evasive answer you have sent."