closely with the government accountability office ( gao ), the office of the special inspector general for the troubled asset relief program, the congress, and privatesector auditors on a range of matters relating to these facilities. while the emergency credit and liquidity facilities were important tools for implementing monetary policy during the crisis, we understand that the unusual nature of those facilities creates a special obligation to assure the congress and the public of the integrity of their operation. accordingly, we would welcome a review by the gao of the federal reserve ’ s management of all facilities created under emergency authorities. 6 in particular, we would support legislation authorizing the gao to audit the operational integrity, collateral policies, use of third - party contractors, accounting, financial reporting, and internal controls of these special credit and liquidity facilities. the federal reserve will, of course, cooperate fully and actively in all reviews. we are also prepared to support legislation that would require the release of the identities of the firms that participated in each special facility after an appropriate delay. it is important that the release occur after a lag that is sufficiently long that investors will not view an institution ’ s use of one of the facilities as a possible indication of ongoing financial problems, thereby undermining market confidence in the institution or discouraging use of any future facility that might become necessary to protect the u. s. economy. an appropriate delay would also allow firms adequate time to inform investors through annual reports and other public documents of their use of federal reserve facilities. looking ahead, we will continue to work with the congress in identifying approaches for enhancing the federal reserve ’ s transparency that are consistent with our statutory objectives of fostering maximum employment and price stability. in particular, it is vital that the conduct of monetary policy continue to be insulated from short - term political pressures so that the fomc can make policy decisions in the longer - term economic interests of the american people. moreover, the confidentiality of discount window lending to individual depository institutions must be maintained so that the federal reserve continues to have effective ways to provide liquidity to depository institutions under circumstances where other received. a revised proposal will be reviewed by the federal reserve board, and test transactions could commence during the second quarter. see bernanke, " federal reserve ’ s exit strategy, " in note 2. last month the federal reserve said that it would welcome a full review by the gao of all aspects of the federal reserve ’ s involvement in the extension of credit to the american international

susan schmidt bies : the economy and challenges in retirement savings remarks by ms susan schmidt bies, member of the board of governors of the us federal reserve system, to the financial executives international baltimore chapter, baltimore, 18 january 2005. * * * i am very pleased to join you for this meeting of the baltimore chapter of financial executives international. today i want to begin with a brief assessment of the economic outlook before discussing financial conditions of households and businesses in more detail. then, i will turn to some important trends in retirement savings, including the responsibilities that both businesses and households have in planning for the financial security of workers later in life. i also need to add that i am expressing my own opinions, which are not necessarily those of my colleagues on the board of governors or on the federal open market committee. the economic outlook as you know, the economy has been expanding at a healthy pace lately. real gross domestic product grew at an annual rate of 4 percent in the third quarter and growth in the fourth quarter looks to have remained solid, although the further widening of our trade deficit was disappointing. labor markets have continued to improve gradually, with private nonfarm payroll employment posting a sizable gain in 2004. consumer spending appears to have been robust during the holiday season, despite some restraint from higher energy prices, and business outlays for capital equipment are on an upward trend. and with financial conditions still accommodative, i expect that the economy will continue to expand at a solid pace this coming year. on the inflation front, broad measures of consumer inflation have risen somewhat faster than they did in the year - earlier period, boosted by higher energy prices. focusing on the core price index, which excludes food and energy, it has been a bit higher than it was the year before. this reflects changes in the pattern of prices of goods ( as opposed to services ) purchased by consumers, as prices of goods that had been falling in 2003 began to stabilize and rise slightly in 2004. these effects should taper off and i expect that core inflation will remain in its current range. moreover, surveys indicate that inflation expectations over the longer - term appear to have remained well - anchored. i believe that, with underlying inflation expected to moderate, the federal reserve can continue to remove its policy accommodation at a measured pace, consistent with its commitment to maintain price stability as a necessary condition for maximum sustainable economic growth. household financial conditions continued economic expansion depends importantly on consumer spending, so let me spend a few