The Federal Reserve is certainly practicing the "do as I say, not as I do" rule when it comes to setting up meetings. Two conferences at luxurious sites, one hosted by the Boston Federal Reserve and one hosted by the San Francisco Federal Reserve, would certainly have raised eyebrows if AIG booked them. If companies that received bailout funding have to cut back on their lavish spending, why does the Fed continue to book top resorts?
The Fed's answer: The conferences don't cost the U.S. taxpayer anything. The organizing agencies recover all of their costs through fees charged to the attendees, and the attendees pay their own way. Yes, the venues are high-end. At the Bacara Resort & Spa near Santa Barbara, Calif., where the San Francisco Fed held its event, rooms range from $250 to $400 per night and suites range from $800 to $2,000 a night. The Wequassett Inn on Cape Cod, Mass., where the Boston Fed held its meeting, regular rooms go for about $320 night and suites can be as high as $1,860 a night. But the Fed negotiates lower rates for its attendees at both events.Nor are these events the frivolous retreats that financial institutions like AIG have been lambasted for hosting. This year's Boston Fed conference was an serious symposium focused on financial regulatory reform. It's an annual meeting that is open to the media and gets widespread coverage each year, so its location has never been a secret. In fact, that conference has been held at the Wequassett Inn for 15 years, and a spokesman for the Boston Fed told ABC News that they were getting better rates from the inn during the off-season then they would get in Boston.
The San Francisco Fed's meeting was a first-of-its-kind Asia conference, and the site was picked to make it easy for interested parties from Asia and around the world to attend. Could they have found cheaper rates in San Francisco hotels? Attendees got a discounted rate of $300 per night, but, again, their fees paid for the the costs of conference, and they paid for their own rooms -- U.S. taxpayers didn't pick up the check.
Still, given the backlash over lavish spending by financial institutions, Fed Chairman Ben Bernanke told ABC News that the Fed should take a look at what it's doing and issue guidelines for future meetings to avoid such controversies in the future.
The largest annual Fed meeting has been held in recent years in Jackson Hole, Wyo. It focuses on important economic issues facing the U.S. and world economies, and symposium participants include prominent central bankers, finance ministers, academics and financial market participants from around the world. The conference is held at Jackson Lake Lodge in Grand Teton National Park, where cottages range from $224 to $329, rooms in the main lodge run from $224 to $319, and suites can cost from $599 to $775. The Fed recovers all costs of this event, too, with attendees paying their own way. As with the annual Boston conference, members of the media attend and it gets widespread coverage.
While the Fed does hold these meetings in the public eye, given the current state of the economy, it ought to plan them in a way that minimizes costs. Even if attendees cover the full cost of these events, their expenses are being written off by the financial institutions and governments that employ them. Indirectly, the public does pay some of the costs for these conferences -- Chairman Bernanke should show the public the respect it deserves, and move the Fed toward a less luxurious lifestyle.
Lita Epstein has written more than 25 books, including The Complete Idiot's Guide to the Federal Reserve and Reading Financial Reports for Dummies.
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