U.S. Rep Frank says Fed audit may send wrong signal

WASHINGTON Sat Dec 12, 2009 2:31am IST

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WASHINGTON Dec 11 (Reuters) - The chairman of the powerful House Financial Services Committee said on Friday that proposals in a U.S. House of Representatives-passed bill to subject the U.S. central bank's policy decisions to more congressional scrutiny goes too far.

"I do think the Fed could be audited. I think it's totally important to us to know what they're buying and selling," Barney Frank, the chairman of the House Financial Services Committee, said on CNBC television.

But he said a House financial regulatory overhaul bill that passed on a 223-202 vote overreached.

"I think the amendment that was adopted went too far," Frank said. "I think it could give the perception that monetary policy is not going to be independent and that would have an inflationary effect in and of itself." (Reporting by Glenn Somerville; Editing by Dan Grebler)

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