U.S. Congress trying to politicise Fed-Dallas Fed chief

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LONDON Jan 26 (Reuters) - The head of the Dallas Federal Reserve accused the U.S. Congress on Tuesday of seeking to politicise the U.S. central bank and in so doing risking putting the world's largest economy on the road to ruin.

Richard Fisher, president of the Dallas Fed said in an article in the Wall Street Journal that the attack last week by some in the Senate against the renomination of Fed Chairman Ben Bernanke was an obstacle to economic recovery because it threatened to compromise the Fed's independence.

"The impulse to use Mr. Bernanke as a political punching bag raises the spectre that, instead of doing the right thing, Congress may seek to pressure the Fed to print its way out of this crisis," Fisher wrote.

"We know from history that when fiscal authorities attempt to monetise their debts, the result is inevitably inflation."

Bernanke's prospects appeared for a second term appeared shaky last week when two Senate Democrats announced their opposition, joining a number of Republicans.

Top Senate Republican Mitch McConnell said on Sunday, however, that he expected Bernanke to be approved with bipartisan support.

Bernanke's critics say the Fed failed to prevent the recent financial crisis, the worst since the Great Depression, and fought the meltdown in a way that favoured the financial industry at the expense of ordinary citizens.

Fisher suggested in his article that the most recent opposition had been fuelled by the successful Senate campaign of Republican Scott Brown in Massachusetts.

He said there were many senators and congressmen who understood the risks of striking out at the Fed.

"But if Congress tampers with the independence of the Federal Reserve, it will move us toward the politicization of the central bank of the world's greatest economy, putting the U.S. on a road that leads directly to economic ruin," he said.

(Editing by Patrick Graham)