An active–and often colorful–debate surrounds recent legislative proposals to “audit” the Federal Reserve. While participants on both sides of this debate have not always been careful to explain exactly what such an “audit” would entail, all of these proposals emphasize that the central bank requires closer monitoring. Some even hint that the Fed is engaged in nefarious activities which, if brought to light, would meet with objections from the American public. Here, we take calls for reform seriously, and propose some structural changes that would turn the Fed into a more transparent, accountable, and ultimately more effective institution.
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