"Establishing clear objectives and making more information available to the markets in a timely fashion will tend to limit uncertainty and promote economic and financial stability," Saxton said. "More complete and accurate information will help markets improve the efficiency of our economic system. Although the Federal Reserve has made some strides towards transparency in recent years, the Treasury has not."

     "For example, Treasury's foreign exchange policy is literally a matter of speculation because no one outside the policy process really knows what U.S. dollar policy is. While no one has advocated the release of propriety or institutional specific information that could disrupt the markets, a clear expression of U.S. policy would often provide information that could make market conditions more stable," Saxton observed. "Furthermore, the Treasury needs to be more responsive to information requests from Congress and the media," he concluded.

     More specifically, Treasury's reports to the Congress on International Economic and Exchange Rate Policy should be more informative, more clearly spelling out the precise objectives of such policy. A detailed explanation of the objectives, purpose and operations of the Exchange Stabilization Fund also is appropriate. Quarterly reports of Treasury and Federal Reserve Foreign Exchange Operations should be more informative, spelling out any connection between foreign exchange operations, dollar policy and Federal Reserve monetary policy objectives.

Press Release: #105-77

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