Recent Exchange Market Intervention

In the past two years, and particularly 1n 1989, the amount of exchange market intervention has increased substantially, and the balances held by the Treasury's Exchange Stabilization Fund and by the Federal Reserve have reached unprecedented levels. Part of the increase 1n the holdings of the Exchange Stabilization Fund has been financed by loans from the Federal Reserve. These loans are outside the budget process and have not been subject to review or Congressional authorization. Indeed, the business of intervention and its financing has, until today, proceeded without the benefit of Congressional authorization or oversight.