I

103D CONGRESS

2D SESSION H. R. 4502

To include additional exchange rate policy information in reports required

to be made by the Board of Governors of the Federal Reserve System

and the Secretary of the Treasury to the Congress, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 26, 1994

Mr. GONZALEZ (for himself, Mr. FRANK of Massachusetts, Mr. KANJORSKI,

and Mr. HINCHEY) introduced the following bill; which was referred to

the Committee on Banking, Finance and Urban Affairs

A BILL

To include additional exchange rate policy information in

reports required to be made by the Board of Governors

of the Federal Reserve System and the Secretary of

the Treasury to the Congress, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Exchange Rate Policy

5 Reporting Act of 1994’’.
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1 SEC. 2. PRESENTATION OF SEMIANNUAL REPORTS OF FED2 ERAL RESERVE BOARD TO CONGRESS.

3 (a) IN GENERAL.—Section 2A of the Federal Reserve

4 Act (12 U.S.C. 225(a)) is amended—

5 (1) by striking ‘‘The Board of Governors of the

6 Federal Reserve System’’ where such term appears

7 in the 1st sentence and inserting ‘‘(a) IN GEN8 ERAL.—The Board of Governors of the Federal Re9 serve System’’; and

10 (2) by adding at the end the following new sub11 sections:

12 ‘‘(b) PRESENTATION OF REPORTS TO THE CON13 GRESS.—

14 ‘‘(1) IN GENERAL.—During the 30-day periods

15 ending on February 20 and July 20 of each year,

16 the Chairman of the Board of Governors of the Fed17 eral Reserve System shall appear before the Com18 mittee on Banking, Finance and Urban Affairs of

19 the House of Representatives and Committee on

20 Banking, Housing, and Urban Affairs of the Senate,

21 upon the invitation of the chairman of each such

22 committee, to present and discuss the reports re23 quired under subsection (a).

24 ‘‘(2) APPEARANCE WITH SECRETARY OF THE

25 TREASURY.—The Chairman of the Board of Gov26 ernors of the Federal Reserve System shall make the
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1 appearance required under paragraph (1) at the

2 same time as the Secretary of the Treasury appears

3 before such committees pursuant to section 3005 of

4 the Omnibus Trade and Competitiveness Act of

5 1988.

6 ‘‘(c) EFFECT OF MONETARY POLICY ON EXCHANGE

7 RATE.—Each report required under this section shall con8 tain a description of—

9 ‘‘(1) the effect the conduct of monetary policy

10 is having on the exchange rate of the United States

11 dollar and the effect the Board anticipates such pol12 icy will have on the exchange rate; and

13 ‘‘(2) the current and anticipated impact of the

14 exchange rate and any anticipated change in the ex15 change rate on domestic interest rates, employment,

16 production, inflation, wages, and economic growth.

17 ‘‘(d) INFORMATION ON CURRENCY SWAPS.—

18 ‘‘(1) IN GENERAL.—Each report required under

19 this section shall contain a description of—

20 ‘‘(A) all currency swap agreements in ef21 fect with any foreign entity;

22 ‘‘(B) any change since the preceding report

23 in any inventory of currencies under the

24 Board’s control; and
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1 ‘‘(C) foreign loans and lines of credit from

2 or to, any foreign entity which are outstanding

3 at the time of the report.

4 ‘‘(2) DETAILED DESCRIPTIONS.—The report

5 shall include a detailed description of—

6 ‘‘(A) any foreign entity referred to in para7 graph (1);

8 ‘‘(B) all conditions of any swap agreement

9 or currency transaction referred to in para10 graph (1); and

11 ‘‘(C) the reasons for, and the benefits of,

12 any such agreement or transaction.

13 ‘‘(e) JULY UPDATES.—The report submitted by July

14 20 of each year shall contain—

15 ‘‘(1) a statement of the anticipated effect the

16 conduct of monetary policy will have on exchange

17 rates during the next calendar year; and

18 ‘‘(2) a statement of the anticipated changes

19 which will occur with respect to the matters required

20 to be reported under subsection (c) and (d).

21 SEC. 3. REPORTS OF THE SECRETARY OF THE TREASURY

22 UNDER THE OMNIBUS TRADE AND COMPETI23 TIVENESS ACT OF 1988.

24 Section 3005 of the Omnibus Trade and Competitive25 ness Act of 1988 (22 U.S.C. 5305) is amended—
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1 (1) in subsection (a)—

2 (A) by striking ‘‘October 15’’ and inserting

3 ‘‘February 20 and July 20’’; and

4 (B) by striking the 2d and 3d sentences;

5 (2) by redesignating subsection (c) as sub6 section (g); and

7 (3) in subsection (b)—

8 (A) by striking paragraph (5); and

9 (B) by redesignating paragraphs (1)

10 through (8) as paragraphs (4) through (10)

11 and inserting before paragraph (4) (as so redes12 ignated) the following new paragraphs:

13 ‘‘(1) a statement of—

14 ‘‘(A) the Secretary’s plans and objectives

15 with respect to the exchange rate of the United

16 States dollar; and

17 ‘‘(B) the extent to which the Secretary has

18 been successful in achieving such objectives;

19 ‘‘(2) an analysis of—

20 ‘‘(A) the factors that are currently affect21 ing the exchange rate of the dollar; and

22 ‘‘(B) the current and anticipated impact of

23 the exchange rate of the dollar on—
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1 ‘‘(i) domestic interest rates, employ2 ment, production, inflation, wages, and

3 economic growth;

4 ‘‘(ii) the current account and the fi5 nancial and capital account of the United

6 States;

7 ‘‘(iii) the international competitive

8 performance of United States industries;

9 and

10 ‘‘(iv) the external indebtedness of the

11 United States;

12 ‘‘(3) a description of—

13 ‘‘(A) all currency swap agreements in ef14 fect with any foreign entity;

15 ‘‘(B) any change since the preceding report

16 in any inventory of currencies under the Sec17 retary’s control; and

18 ‘‘(C) foreign loans and lines of credit from

19 or to, any foreign entity which are outstanding

20 at the time of the report;’’;

21 (4) by inserting after subsection (b) the follow22 ing new subsections:

23 ‘‘(c) CHANGES IN POLICY.—

24 ‘‘(1) IN GENERAL.—This section shall not be

25 construed as requiring the plans disclosed in any re-
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1 port under subsection (a) to be carried out by the

2 Secretary after such report is submitted to the Con3 gress if the Secretary determines that, because of

4 changing conditions and circumstances, such policies

5 cannot or should not be carried out or the objectives

6 for such plans cannot be achieved.

7 ‘‘(2) REPORT ON DETERMINATION.—If the Sec8 retary makes any determination described in para9 graph (1) with respect to any plans and objectives,

10 the Secretary shall include in the next report under

11 subsection (a) after such determination an expla12 nation for any revision or deviation from the plan or

13 objective.

14 ‘‘(d) REPORTS ON INTERVENTIONS.—If the Sec15 retary intervenes, or directs the Board of Governors of the

16 Federal Reserve System or any Federal reserve bank to

17 intervene, in the currency markets, the Secretary shall

18 submit a report to the Congress before the end of the 24-

19 hour period beginning at the time such intervention begins

20 describing the factors which prompted the intervention

21 and the objectives of the intervention.

22 ‘‘(e) JULY UPDATES.—The report submitted by July

23 20 of each year shall contain—

24 ‘‘(1) a statement of the Secretary’s plans and

25 objectives with respect to the exchange rate of the
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1 United States dollar during the next calendar year;

2 and

3 ‘‘(2) a statement of the anticipated changes

4 which will occur with respect to the matters required

5 to be reported under paragraphs (2) and (3) of sub6 section (b).

7 ‘‘(f) APPEARANCE BEFORE CONGRESSIONAL COM8 MITTEES WITH THE CHAIRMAN OF THE FEDERAL RE9 SERVE BOARD.—The Secretary shall appear before the

10 Committee on Banking, Finance and Urban Affairs of the

11 House of Representatives and Committee on Banking,

12 Housing, and Urban Affairs of the Senate, upon the invi13 tation of the chairman of each such committee, to present

14 the report required under this section and answer ques15 tions relating to the report and United States policy at

16 the same time as the Chairman of the Board of Governors

17 of the Federal Reserve System appears before such com18 mittees pursuant to section 2A(b) of the Federal Reserve

19 Act.’’.

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