Bloomberg News

GAO Reiterates Federal Reserve Needs to Improve Risk Management

October 03, 2011

Oct. 3 (Bloomberg) -- The Federal Reserve needs to improve its risk management practices for lending during financial crises, an official from the U.S. Government Accountability Office said in prepared testimony.

“Existing policies and procedures for managing employee conflicts may not be sufficient to avoid the appearance of a conflict in all situations,” Orice Williams Brown, managing director of financial markets and community investment for the GAO, said in a copy of testimony obtained by Bloomberg News.

Brown is scheduled to speak tomorrow before a U.S. House subcommittee during a hearing focused on auditing the Fed. Brown’s testimony is based on a GAO study released in July on the central bank board’s emergency actions from December 2007 to July 2010.

--Editors: James Tyson, Kevin Costelloe

To contact the reporters on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net; Phil Mattingly in Washington at pmattingly@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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