Welcome

Thank you for visiting paducahsun.com, the online home of The Paducah Sun.

Calendar
June 2012
S M T W T F S
27 28 29 30 31 01 02

Click here to submit an event.

Bernanke likens financial crisis to a car crash

by MARTIN CRUTSINGER Associated Press

WASHINGTON - In his final public appearance as chairman of the Federal Reserve, Ben Bernanke took a moment to reflect on the 2008 financial crisis and compared it to surviving a bad car crash.

During an interview Thursday at the Brookings Institution, Bernanke recalled some "very intense periods" during the crisis, similar to trying to keep a car from going over a bridge after a collision.

The government had just taken over mortgage giants Fannie Mae and Freddie Mac. Lehman Brothers had collapsed. He recalled some sleepless nights working with others to try and contain the damage.

"If you're in a car wreck or something, you're mostly involved in trying to avoid going off the bridge. And then, later on, you say, 'Oh my God!'" Bernanke said.

Bernanke will leave the Fed on Jan. 31 after eight years as chairman. His successor, Janet Yellen, will take over on Feb. 1.

In his appearance, Bernanke defended the Fed's efforts during the crisis, which included massive purchases of Treasury bonds to push long-term interest rates lower and forward guidance to investors about how long the Fed plans to keep short-term interest rates near zero.

Critics have warned that those efforts pose great risks for higher inflation or future financial market turmoil.

But Bernanke says there has not been a problem with inflation, which is still running well below the Fed's 2 percent target.

Should inflation start to be a problem as the economy starts growing, the Fed "has all the tools we need to manage interest rates" to keep inflation from getting out of hand, he said.

"Inflation is just not really a significant risk" from the bond purchases, Bernanke said.

Bernanke said the central bank was aware of potential threats to financial market stability from its massive bond holdings and is monitoring markets very closely to spot any signs of trouble. He said this threat was the one "we have spent the most time thinking about and trying to make sure that we can address" should the need arise.

But he said any concerns about financial stability did not outweigh the need to keep providing support to the economy.

Comments made about this article - 0 Total

Comment on this article

Your comment has been submitted for approval
captcha 42b2230906b34344abbb0ec32df5b758
Top Classifieds
  • AKC Shih-Tzu Vet checked, $600 731-3 ... Details
  • Museum Quality Ornate Antique Furnitu ... Details
  • PILLOW TOPmattress sets NEW in plasti ... Details
  • CHARLES SMITH CONCRETE REPAIR &RE ... Details
  • Cash for Farms (270)339-8680 Details
  • Bedroom Suites New in Boxes. 6pc. che ... Details
  • Seasoned Firewood. 270-243-5815 Details
  • 5 Broiler Houses80 acres irrigated pa ... Details
  • SEEING is believing! Don't b ... Details
  • Owner Financing, new 3000sq ft,in Mar ... Details
  • 375 Acre Farm in Ballard County D ... Details
  • FHA, USDA, VA & Conventional Loan ... Details
  • Hyundai Accent '02 $1,800 97 ... Details
  • 05 CHEVY MALIBU $2500(270) 388-5983 Details
  • '06 Lincoln Truck One of the ... Details

Most Popular
  1. Vikings clip Falcon wings on road
  2. Last Oregon occupiers surrender
  3. Chihuahua saves family from fire
  1. Community looks for missing woman
  2. McCracken County Indictments
  3. Chihuahua saves family from fire
  1. Student helps further bullying bill
  2. Vikings clip Falcon wings on road
  3. Last Oregon occupiers surrender
Discussion

Check out these recently discussed stories and voice your opinion...