Bernanke regrets not explaining crisis better
By Rob Gillies, AP
April 24, 2014, 12:00 am TWN
TORONTO--Former U.S. Federal Reserve Chairman Ben Bernanke said he could have done a better job in helping people understand the action the central bank took during the financial crisis.
Bernanke stepped down in late January after eight years as chairman of the Federal Reserve.
When asked if he any regrets, Bernanke told a Toronto business crowd on Tuesday that it's unfortunate the public thinks the bank favored Wall Street instead of Main Street — that is big investors instead of small investors.
He said one of the challenges still out there is to help people understand why stabilizing the financial system was so important.
"I still think there are a lot of people out there who really don't understand why we did what we did," he said.
The U.S. economy and financial system fell into their gravest crisis since the Great Depression of the 1930s during his tenure.
Once the financial crisis erupted in 2008, he joined with Treasury Secretary Henry Paulson to craft an aggressive multipronged response. The Fed created emergency programs to spur lending and restore confidence in banks. These programs aimed to keep credit, the economy's lifeblood, flowing. They soon covered everything from overnight business loans and money-market funds to credit card debt and mortgage bonds.
Bernanke also helped persuade Congress to approve a US$700 billion bank bailout fund. He warned lawmakers, in ominous terms, what could befall the economy if they didn't vote to provide support. They did.
Bernanke said during his speech at the Economic Club of Canada that the U.S economy is making tremendous progress.
"Many of the headwinds that came from the crisis, from policy and housing, are beginning to dissipate," Bernanke said.
Bernanke reportedly earned US$250,000 for a recent speech in Abu Dhabi. The Economic Club of Canada did not respond to messages when asked how much Bernanke made for his speech in Toronto in front of a packed business crowd. RBC Capital Markets, BNP Paribas and AGF sponsored the Toronto event.