Support for increased Federal Reserve transparency is founded mainly on the Constitutional concept of checks and balances within governmental structure.  Unlike the President and Congressional bodies, which were both constitutionally sanctioned, and who combine to control the fiscal policy making within the U.S. economy, the Federal Reserve is never mentioned in the Constitution.  This lack of Constitutional foresight means that the Federal Reserve does not have any inherently designed checks or balances once their members are appointed.  This is a rather disturbing fact considering that the Fed controls the monetary policy for U.S. currency.  The current structure makes the shared responsibilities between the bodies which control U.S. fiscal and monetary policies asymmetric in the oversight sanctioned to them.  While the Federal Reserve Chairman must be appointed and confirmed by the Executive and Legislative branches, the Chairmen cannot be removed from the position based on policy decisions or standing.  Also potentially alarming about this structure of power is the Federal Reserve’s lack of an explicit nominal anchor in their policy choices.  While other Central Banks around the world base their policy around an explicit anchor or goal, generally high employment or controlled inflation, the Federal Reserve does not.  Instead, the Federal Reserve operates based on an implicit nominal anchor, a system which targets similar goals to other Central Banks such as high employment and limited inflation, yet is more malleable to the specific developments within the economy.  While this approach is advantageous in the fact that it allows for flexibility if the economy begins to act erratically, it is dangerous in the sense that the Federal Reserve’s approach to economic tumultuousness is based highly on the Chairman’s personal economic beliefs and policies.  This reality has played a major role within the economic recovery since the 2007 financial meltdown, especially regarding Bernanke’s support of both the TARP and Quantitative Easing initiatives.  While of course it is difficult to assess empirically the success of either program, each effort was nonetheless a major program which resulted in trillions of U.S. dollars being allocated at the discretion of a few.  For this reason, the United States Federal Reserve should make transparency not just a priority, but a policy, when considering and communicating their actions.

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