Hot on Facebook

Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

How the Crisis Changed Bernanke

Extraordinary times have changed the Fed chairman's language and policy

By Nick McMaster, Newser Staff

Posted Feb 19, 2009 12:33 PM CST

(Newser) – Crises change people, and the changes wrought by the financial meltdown on Fed Chairman Ben Bernanke were well evident at a Press Club lunch yesterday, writes Dana Milibank for the Washington Post. Previously known for bland answers, this academic now tempers his economist-speak with straight talk and supplemented official data with a story about how the crisis has hurt his South Carolina hometown.

The crisis has changed Bernanke’s actions as well: He’s expanded the scope of Fed intervention to direct lending and the buying of mortgage securities. At yesterday’s luncheon he seriously discussed a short-term nationalization of the most troubled banks—an unexpected turn for a chairman nominated by George Bush. As Bernanke said yesterday: "Extraordinary times call for extraordinary measures.” Indeed.

[Images (3)]

[Quotes (1)]

Federal Reserve Chairman Ben Bernanke speaks at the National Press Club in Washington, Wednesday, Feb. 18, 2009. (AP Photo/Susan Walsh)

Federal Reserve Chairman Ben Bernanke listens as Treasury Secretary Timothy Geithner holds a news conference detailing the administrations plans for the economic recovery, Tuesday, Feb. 10, 2009. (AP Photo/Lawrence Jackson)

Federal Reserve Chairman Ben Bernanke speaks at the National Press Club in Washington, Wednesday, Feb. 18, 2009. (AP Photo/Susan Walsh)

« Prev« Prev | Next »Next » Slideshow

Somebody once called this the Augustinian principle, which says something like, 'Let me be moral, but not quite yet.' - Ben Bernanke, talking about the paradox of encouraging spending though overspending caused the economic crisis

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

35 Brutally Honest Reasons Men Say No to Sex (The Stir)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Which Celeb Dedicated Song to Her Famous Husband Despite Divorce Rumors? (NewsOne)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 4 comments

Guest

Feb 19, 2009 7:11 PM CST

Amen

DavoMax

Feb 19, 2009 2:36 AM CST

it was asinine to think that the greedy people making all that money would look out for the interest of the common person and the good of the economy. i say strengthen the regulations. And hearing about how this Palin character has been charging per diems while she was sleeping in her own bed and talkshow interviews, I get a chill thinking what she/they/repubs could do at a national level. She couldm't find a handbag big enough to stuff the cash they would pilfer. Obama was clearly the safest choice.

alienvv

Feb 19, 2009 2:07 AM CST

It was all seeded by Alan Greenspan...

What's Popular Now on Facebook

E-Cigarette Explodes in Man's Mouth

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

Washington Post (Source Grid »)

Read Bernanke's comments to the National Press Club
Forbes

Fed's experimentation could be dangerous
Barron's

Money

Ben Bernanke • Federal Reserve • nationalization • bank • mortgage backed securities • emergency lending • financial crisis

More Newser Stories

Fed Earns Record $45B

Efforts to save economy result in windfall

(NEWSER) - The Federal Reserve's efforts to keep the economy afloat last year earned it the highest profits in its 96-year history. The Fed—which funds itself and turns its earnings over to the Treasury—made a total of $45 billion last year, dwarfing the profits of many big banks. Interest on the Fed's $1.8 trillion in government bonds and mortgage-backed securities accounted for much of the earnings. More»

Bernanke: Risks Remain Despite Stress Tests

But Fed chief is encouraged by bank response

(NEWSER) - Big banks' response to "stress tests" has been encouraging but they will need to watch out for risks not covered by the tests, Ben Bernanke warned regulators yesterday. The Fed chief—signaling that investment giants like Goldman Sachs can expect tighter scrutiny—said banks should self-test for potentially disastrous "operational, liquidity and reputational risks," Bloomberg reports. Bernanke warned that the financial situation remained fragile, and that the government was prepared to inject more capital to shore up the system. More»

We Know What We're Doing, Bernanke Assures Congress

Fed chair defends response to financial crisis

(NEWSER) - Ben Bernanke defended the government’s response to the financial crisis today before Congress, saying regulators’ various approaches reflect different aspects of a unified strategy, MarketWatch reports. “We’re not making it up,” the Federal Reserve chief said. “We’re working along a program that has been applied in various contexts. We’re not completely in the dark.” More»

Fed Pumps $19B Into Market

Will add $19B in temporary funds to bolster credit markets

(NEWSER) - The Federal Reserve pumped $19 billion in temporary funds into the banking system today by buying up mortgage-backed securities. The move is aimed to insure that there is enough cash available in the credit markets and keep the interest rate close to the Fed's target of 5.25%. It also makes it clear that the Fed does not yet plan to cut that interest rate, Bloomberg reports. More»

Foreign Banks Got Majority of Secret Fed Loans

Court forces Fed to release info

(NEWSER) - When the Federal Reserve opened its “discount window” at the height of the financial crisis, a lot of foreign banks lined up. The 97-year-old program hit an all-time high during October 2008, and during its peak week, 70% of the $110.7 billion doled out went to foreign banks, according to data the Fed has long tried to keep secret. Bloomberg obtained the documents after winning a court case over its Freedom of Information Act request. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

How the Crisis Changed Bernanke