Sanders Drops Proposal to Audit Fed’s Monetary Policy Decisions(Bloomberg) -- by Craig Torres and Alison Vekshin --
Senator Bernard Sanders dropped a proposal to audit the Federal Reserve’s monetary policy that the central bank had said posed a threat to its independence.
The Vermont independent narrowed the scope of an amendment to financial-overhaul legislation to “a one-time audit of all loans and other financial assistance” starting in December 2007. He also included a review of how regional Fed bank directors are appointed.
Senate Banking Committee Chairman Christopher Dodd threw his support behind the revised legislation after opposing previous versions that called for broader audits of the Fed decisions. Senators are debating the most sweeping overhaul of financial regulation since the Great Depression.
“There was a concern about whether or not the independence of the Fed in any way would be compromised, and he has guaranteed with his language here that that is no longer an issue whatsoever,” Dodd, a Connecticut Democrat, said from the Senate floor today. Republicans Charles Grassley of Iowa and Sam Brownback of Kansas also voiced support.
Federal Reserve Chairman Ben S. Bernanke opposed earlier versions of the Sanders amendment, saying in a letter released today that it could “seriously threaten” monetary policy independence, fuel concerns about inflation and damage economic stability and job creation...MORE...LINK