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Corker Against Auditing the Fed

Bob Corker thinks an audit of the Federal Reserve would be disastrous both for the U.S. and “the free world.”

Tennessee’s junior senator, who sits on the Senate Banking committee, told attendees at a Bloomberg breakfast last week that he “can’t imagine anything worse for the nation or for the free world than for Congress to get involved in monetary policy.”

Nevertheless, Corker said he supports more transparency in how the Fed regulates banks.

Corker, who served as commissioner of Tennessee’s Department of Finance and Administration in the Republican administration of former Gov. Don Sundquist, characterized “this audit the Fed thing” as an unwelcome invitation to more congressional involvement in monetary policy. He called that out as “a problem.”

All the same, Corker said he expects Congress to take some action on making financial regulations — such as how the Fed administers stress tests at large banks — more transparent.

In January, Sen. Rand Paul and Rep. Thomas Massie, both libertarian-leaning Republicans from Kentucky, introduced legislation calling for a congressional review of the U.S. central bank’s monetary policy discussions, which have been exempt from legislative scrutiny since 1978.

The Federal Reserve Transparency Act of 2013 passed the GOP-controlled U.S. House last September with over 100 Democrats joining 227 Republicans in support of the bill, but it was never taken up by the Democrat-controlled Senate.

Audit proponents had hoped demands for hearings last year by U.S. Sen. Elizabeth Warren, D-Mass., regarding allegations the New York Fed was taking it easy on the banks it regulates, signaled broader support for a congressional audit. However, Warren recently announced her opposition to the audit proposed by Paul.