Beacon Hill Condominiums

An example of the increased openness of the Fed under Greenspan is the written text released when the Board of Governors makes a decision, such as the recent series of hikes to the federal funds rate. For the last year, Greenspan, and hence the Fed, has raised short-term rates by a quarter percentage point at each of its last 12 meetings. Each time, the Fed released an explanation of the reasoning behind the decision.

"One possible step toward greater transparency would be for the FOMC (Federal Open Market Committee) to state explicitly the numerical inflation rate or range of inflation rates it considers to be consistent with the goal of long-term price stability," Bernanke noted.

Though he thinks an explicit numerical inflation goal would be a step toward greater transparency, he said he wouldn't take "precipitate," or overly speedy, steps to make that change.

"Providing quantitative guidance about the meaning of 'long-term price stability' could have several advantages, including further reducing public uncertainty about monetary policy and anchoring long-term inflation expectations even more effectively," Bernanke said.

The 51-year-old nominee is expected to be approved quickly. A former Princeton University professor who served as a Fed governor and is now President George W. Bush's top economic adviser, Bernanke is widely considered one of the country's top monetary scholars.

If the Senate approves his nomination, Bernanke would succeed Alan Greenspan, whose non-renewable term as chairman ends Jan. 31.