Financial Regulatory Forum

Bernanke seeks government audit of Fed’s AIG bailout

WASHINGTON, Jan 19 (Reuters) – U.S. Federal Reserve chairman Ben Bernanke on Tuesday asked a government auditor to review the Fed’s actions in bailing out American International Group IncĀ in 2008, as controversy persisted over the central bank’s role in extending billions in credit to the insurer.

Bernanke, in a letter to Acting Comptroller General Gene Dodaro, said the Fed would make available to the Government Accountability Office all documents and personnel necessary to conduct the review.

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U.S. House OKs Fed audit provision, eyes on Senate

By Mark Felsenthal

WASHINGTON, Dec 11 (Reuters) – The U.S. Federal Reserve on Friday lost the opening round in a battle to defeat a congressional plan to subject its interest rate decisions to audits, and will now look for a comeback victory when the Senate starts to move on regulatory reforms.

The House of Representatives delivered the loss with a 223-202 vote in favor of a revamp of financial regulation that, among other things, would pare Fed supervision over financial firms and its capacity to provide emergency help to banks, while allowing audits of monetary policy by a watchdog agency.

Fed Chairman Ben Bernanke and other top officials for weeks had argued the audit provision would result in a costly impression that the central bank’s rate decisions could be swayed by politics. They warned this could lead financial markets to fear inflationary policies, which in turn could drive up borrowing costs and undermine the economy.

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