What Fed-Audit Legislation Would Mean......

Overturning current limits on government audits of the Federal Reserve has become a key goal of the central bank's critics inside and outside Congress. House lawmakers are expected to seek a comprehensive audit of the Federal Reserve system by the Government Accountability Office, the investigative arm of Congress, as part of a broader overhaul of financial regulation this fall. But the precise scope of such an audit remains undetermined. The move follows a proposal by Rep. Ron Paul (R., Texas), endorsed by two-thirds of the House, that would require the GAO to conduct an audit by the end of 2010. It would override—for at least that period—a law that shields the Fed's monetary-policy decisions from GAO inquiries. Rep. Barney Frank, chairman of the House Financial Services Committee, is in talks with Mr. Paul on the details of the bill, and has said he expects some version to pass the House this fall. But Mr. Frank said he would ensure the Fed's independence in setting interest rates and other aspects of monetary policy...Link