Comments and Quotes
Federal Reserve Chairman Ben Bernanke
Date
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Quote
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September
2000
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A collapse in U.S. stock
prices certainly would cause a lot of white knuckles on Wall Street. But what
effect would it have on the broader U.S. economy? If Wall Street crashes,
does Main Street follow? Not necessarily.
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November
21st, 2002
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Over the years, the U.S. economy has shown a remarkable
ability to absorb shocks of all kinds, to recover, and to continue to grow.
Flexible and efficient markets for labor and capital, an entrepreneurial
tradition, and a general willingness to tolerate and even embrace
technological and economic change all contribute to this resiliency.
National Economists Club, Washington, D.C. |
November 15th, 2005
|
“U.S. financial markets would
likely be able to absorb a significant shift in foreign official demands for
U.S. debt, including by China.”
Moreover, the agencies have made clear that no bank is
too big too fail, so that bank management, shareholders, and uninsured debt
holders understand that they
Response to written questions received from Senator Jim Bunning in connection with the hearing before the Committee on Banking, Housing, and Urban Affairs on November 15, 2005 |
March 28th, 2007
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"At this juncture, the impact on the broader economy and
financial markets of the problems in the subprime market seems likely to be
contained."
The Economic Outlook: Joint Economic Committee, U.S. Congress:
|
April 3rd, 2008
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"Given the exceptional
pressures on the global economy and financial system, the damage caused by a
default by Bear Stearns could have been severe and extremely difficult to
contain.”
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July 19th, 2007
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“Promoting access to credit and
to homeownership are important objectives, and responsible subprime mortgage
lending can help advance both goals. In designing regulations,
policymakers should seek to preserve those benefits.”
“However, with long-term
inflation expectations contained, futures prices suggesting that investors
expect energy and other commodity prices to flatten out […]”
“The
unemployment rate is anticipated to edge up to between 4-1/2 and 4-3/4
percent over the balance of this year and about 4-3/4 percent in 2008, a
trajectory about the same as the one expected in February.”
“The
central tendency of the growth forecasts, which are conditioned on the
assumption of appropriate monetary policy, is for real GDP to expand roughly
2-1/4 to 2-1/2 percent this year and 2-1/2 to 2-3/4 percent in 2008.”
Semiannual Monetary Policy Report to the Congress |
September 20th, 2007
|
“The Federal Reserve takes responsible lending and
consumer protection very seriously. Along with other federal and state
agencies, we are responding to the subprime problems on a number of
fronts. We are committed to preventing problems from recurring, while
still preserving responsible subprime lending.”
“The risk of moral hazard must be considered in
designing government-backed programs; such programs should not bail out
failed investors, as doing so would only encourage excessive risk-taking.”
“However, in my view, the reason that GSE
securitizations are well-accepted in the secondary market is because they
come with GSE-provided guarantees of financial performance, which market
participants appear to treat as backed by the full faith and credit of the
U.S. government, even though this federal guarantee does not exist.”
Subprime mortgage lending and mitigating foreclosures: Committee on Financial Services, U.S. House of Representatives |
October 15th, 2007
|
It does seem
that, together with our earlier actions to enhance liquidity, the September
policy action has served to reduce some of the pressure in financial markets,
although considerable strains remain. From the perspective of the near-term
economic outlook, the improved functioning of financial markets is a positive
development in that it increases the likelihood of achieving moderate growth
with price stability.
However, in such
situations, one must also take seriously the possibility that policy actions
that have the effect of reducing stress in financial markets may also promote
excessive risk-taking and thus increase the probability of future crises.
"It is not the responsibility of the Federal Reserve - nor would
it be appropriate - to protect lenders and investors from the consequences of
their financial decisions."
Speech at the Economic Club of New York |
May 17th, 2007
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The subprime mess
is grave but largely contained. While
rising delinquencies and foreclosures will continue to weigh heavily on the
housing market this year, it will not cripple the U.S.
|
October 15th, 2007
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"I'd like to
know what those damn things are worth. Until investors are confident in their
evaluations, they are not going to be willing to fund these vehicles."
Regarding complex mortgage securities that are inscrutable to many investors |
January 17th, 2008
|
“To be useful, a fiscal stimulus package
should be implemented quickly and structured so that its effects on aggregate
spending are felt as much as possible within the next twelve months or so.”
“As I have discussed on other occasions, the
nation faces daunting long-run budget challenges associated with an aging
population, rising health-care costs, and other factors. A fiscal
program that increased the structural budget deficit would only make
confronting those challenges more difficult. ”
The Economic Outlook: Committee on the Budget, U.S. House of Representatives |
February 29th, 2008
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"I expect
there will be some failures. I don't
anticipate any serious problems of that sort among the large internationally
active banks that make up a very substantial part of our banking
system."
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June 9th, 2008
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Despite a recent spike in the nation's unemployment rate, the
danger that the economy has fallen into a "substantial downturn"
appears to have waned,
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July 16th, 2008
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The recent
expansion of the subprime market was clearly accompanied by deterioration in
underwriting standards and in some cases, by abusive lending practices and
outright fraud…”
“Thus, declines in residential construction will likely continue to weigh on economic growth over coming quarters,
although the magnitude of the drag on growth should diminish over time…”
Semiannual Monetary Policy Report to the Congress: Before the Committee on Financial Services, U.S. House of Representatives
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July 16th, 2008
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“… no danger of failing.” “adequately capitalized” In reference to Freddie Mac and Fannie Mae |
August 23rd, 2008
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If no countervailing actions are taken, what would be perceived as an implicit expansion of the safety net could exacerbate the problem of `too big to fail,' possibly resulting in excessive risk-taking and yet greater systemic risk in the future.” In Regards to the bailout of Freddie Mac and Fannie Mae |
September 19th, 2008
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Bernanke called the current problems the "most severe financial crisis" in the post-World War II era. Investment banks are seeing "tremendous runs on their cash," Bernanke said. "Without action, they will fail soon.” |
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Contact your representatives today,
and tell them what you think of Mr. Bernanke's statements!
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You can locate your Senators here: The Senate
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