House panel OKs plan to open Fed policy to audits

A U.S. congressional panel on Thursday approved a measure to open the Federal Reserve's monetary policy decisions to government audits, a surprise blow to the central bank's efforts to shield its independence and a signal of frustration with the central bank. The provision, co-sponsored by Republican Representative Ron Paul and Democrat Alan Grayson, would allow a congressional watchdog agency to conduct a broad review of the U.S. central bank's policy and lending. Fed officials have strongly opposed it, saying it would cast doubt on the central bank's independence from political pressure. The House of Representatives Financial Services Committee approved the amendment to broader legislation to revamp financial rules. The panel put off a vote on the broader measure. House Financial Services Committee Chairman Barney Frank, who opposed the Paul-Grayson measure, predicted it would be revisited when financial reform legislation is debated by the House.