Bernanke: New audit powers would "seriously threaten" monetary policy

Federal Reserve Chairman Ben Bernanke warned in a letter to senators that proposed audit powers over the central bank would "seriously threaten" the independence of monetary policy.

The central bank has repeatedly urged caution about a Senate amendment backed by a wide range of liberal Democrats and conservative Republicans that would give the Government Accountability Office (GAO) additional powers to audit the Fed. A similar bill passed the House in December.

Sen. Bernie Sanders (I-Vt.) is the main backer of a Senate amendment allowing for additional audits and calling for greater transparency of the Fed's actions during the financial crisis.

"Such amendments, if enacted, would seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation," Bernanke said in a letter.