Bernanke backs Senate's Fed audit measure

Federal Reserve Chairman Ben Bernanke backed a Senate measure that would open up the Fed's books but called "destructive" a more stringent audit provision backed by the House.

The financial regulatory reform bill passed in the Senate would allow the General Accountability Office (GAO) to conduct additional audits of the central bank's financial transactions so "you'll be able to see taxpayer money is used well," Bernanke said.

"We are absolutely comfortable with that and we are quite satisfied that we have an agreement to do that," Bernanke said at a House Budget Committee hearing on the economy Wednesday.

Bernanke was responding to a question about the financial reform bill from Rep. Lloyd Doggett (D-Texas).

The House version allows the GAO to scrutinize its monetary policy, something the bank is exempt from currently.

Bernanke said that "would be destructive to confidence in the Fed on the part of the markets and the public."

The two chambers plan to reconcile their two bills this month.

The Senate provision on Fed transparency was a compromise struck between lawmakers led by Sen. Bernie Sanders (I-Vt.), who wanted the tougher auditing powers, and the White House, senior lawmakers and the Fed, who wanted to maintain the bank's independence to set monetary policy.

Cross-posted to On the Money