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The central bank's hands-off approach to using interest rates to pop asset bubbles and reluctance to impose new rules will come under scrutiny as policy makers and economists from around the world gather for the annual symposium organized by the Kansas City Fed bank starting today in Jackson Hole, Wyoming.

Forcing more disclosure about the quality of assets behind the securities that became the flashpoint of the credit crisis will be one option floated at the conference, participants and Fed watchers said. A more complete picture might better guide monetary policy and help Bernanke deliver more accurate cues to the public.

``It's extremely important that he provide some signal that the Fed has been chastened by these events,'' said Tom Schlesinger, head of the Financial Markets Center, a Howardsville, Virginia-based group that researches the Fed. Bernanke needs to consider ``a substantial rethinking of the assumptions and practices that led us to this point,'' he said.

While the Fed chief may be reluctant to alter his views in the middle of the subprime fallout, he is likely to be probed by central bankers and economists flying in to the mountain retreat. The conference's theme is housing and monetary policy, and Bernanke delivers the opening speech tomorrow.

Chatter at the Bar

``The questions at least need to be asked and seriously examined,'' said Michael Mussa, a former International Monetary Fund chief economist who will attend the event and is now at the Peterson Institute for International Economics in Washington. ``The issue will come up in the discussions at the conference and the bar afterwards.''

The first hints of whether Bernanke will entertain any changes may come when he addresses the conference. Tonight he delivers welcoming remarks at dinner, and tomorrow he speaks on housing and monetary policy at 10 a.m. New York time. The next day, Fed Governor Frederic Mishkin presents a paper on ``Housing and the Monetary Transmission Mechanism.''

The Jackson Hole gathering is traditionally attended by most Fed governors and district-bank presidents. Nine years ago, former Chairman Alan Greenspan held private talks with officials there that paved the way for an interest-rate cut weeks later. The action followed a credit crunch triggered by Russia's debt default.

Speculation on Rates

This time, policy makers arrive as continuing stress in credit markets spurs calls for a rate reduction.

The Fed underestimated the impact of the slide in securities backed by subprime mortgages, minutes of their Aug. 7 meeting showed two days ago. Investors shunned the debt in the wake of rising delinquencies that officials now concede were stoked by loose lending standards.

While the Fed reduced the cost of direct loans to banks on Aug. 17 to help contain the credit crunch, officials have kept the benchmark rate at 5.25 percent. The Federal Open Market Committee next meets Sept. 18.

Bernanke is already getting plenty of advice from key U.S. lawmakers who oversee the Fed. Senate Banking Committee Chairman Chris Dodd summoned Bernanke and Treasury Secretary Henry Paulson to an hour-long meeting Aug. 21, saying afterward Bernanke agreed to use ``all of the tools at his disposal'' to restore stability.

Calling a Hearing

House Financial Services Committee Chairman Barney Frank, who is convening a hearing on the market turmoil Sept. 5 with Fed and Treasury officials, told reporters Aug. 21 the session will focus on lessons learned and whether regulations are ``in need of updating.''

In Jackson Hole, speakers include Otmar Issing, the former European Central Bank chief economist who argues that, when asset prices balloon, policy makers should raise interest rates.

ECB President Jean-Claude Trichet canceled his trip to the conference for ``personal reasons,'' spokesman Wiktor Krzyzanowski said today.

William White, head of the monetary and economics department at the Bank for International Settlements, also says central banks pay too much attention to consumer-price inflation and not enough to asset prices. He speaks on housing finance tomorrow.

Bernanke, a former Princeton University economics professor, first appeared at Jackson Hole in 1999, with a paper arguing that central banks shouldn't target asset prices except when they affect the economy as a whole. He's repeated that since becoming chairman. Many American peers still agree.

`Not so Convinced'

``I'm not so convinced that this episode is a strike against that,'' said former Fed Vice Chairman Alan Blinder, now a Princeton economist. ``Whatever has happened, it hasn't been caused by an implosion of housing prices.''

Aside from considering a greater focus on asset prices, the Fed needs to explore whether it should coax or require additional disclosures from banks and hedge funds, according to some observers.

``The Fed has to obviously work to get much better information about how securitization is working and have a better feeling for what's going on in these asset markets,'' said David Hale, an economist and regular at the Jackson Hole conference.

The ``big debate'' will be about how subprime mortgages were turned into gold-plated securities, especially the collateralized debt obligations that have caused the headaches, said Hale, president of Hale Advisors LLC in Chicago.

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