Monday, July 27, 2009

Bernanke Opposes Audit Of Fed Monetary Policy

WASHINGTON - Federal Reserve Chairman Ben Bernanke on Friday said he opposed legislation moving on Capitol Hill that would allow the Government Accountability Office, the investigative arm of Congress, to audit the central bank's monetary policy goals. "We are more than happy to work with the GAO and open to giving them broad authority to look at various aspects of our operations, including our responses to the financial crisis, but we are worried that an audit of monetary policy would result in a reduction of the independence of the Fed," Bernanke told lawmakers at a hearing on regulatory reform on Capitol Hill. Two pieces of legislation in the House and one in the Senate would compel the GAO to conduct a monetary-policy audit at the Fed and issue a report. One GAO audit bill, introduced by Rep. Ron Paul, R-Texas, has 245 co-sponsors, and would require an audit of every aspect of the Fed, including its interest rate policy as well as its wide-variety of programs responding to the financial crisis such as its lender of last resort authority.

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