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 dbcecb432c224925a18f7325245e5f26
Top Classifieds
  • ROCKY Mountain Mare - 8 yrs old - goo ... Details
  • Rottweiler Mastiff Mixed Pups - Mom h ... Details
  • FULL blooded healer pups-All shots/wo ... Details
  • Cocker Spaniel Pups.AKC (270)476-2580 ... Details
  • RUNNING, fixable, junk vehicles, equi ... Details
  • PILLOWTOP Mattress Sets, NEW in plast ... Details
  • Save Money on your Mortgage! No refin ... Details
  • SEEING is believing! Don't buy p ... Details
  • 1994 Ardmore by Clayton 16x80 Must be ... Details
  • 1000 Wayside Dr 4BR, 3.5B $264,900270 ... Details
  • Office/Warehouse Updated Office with ... Details
  • BASEMENT home- 550 Oak Valley Rd - Ma ... Details
  • Lake Front Home 3,000 sq. ft., Kuttaw ... Details
  • 19'8" BASS TRACKER PRO - 27 ... Details
  • 2005 Ford Taurus, 115k miles, exc. co ... Details
  • 2012 Nissan Altima SL Coupe Nice! 28K ... Details
  • AMC SST '72 4 dr. sedan, Onlytw ... Details
This Week In Photos
Most Popular
  1. Baseball series a hit for city
  2. Baseball series a hit for city
  3. Madison emergency official resigns after audit finds theft
  1. 84-year-old Paducahan lands giant carp
  2. 6 officers indicted in Gray death
  3. Suspect arrested on prescription drug charges
  1. Bible, Quran promote different approaches to life
  2. Baseball series a hit for city
  3. Baseball series a hit for city
Discussion

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