Early Increase In Interest Will Make Side Effects Of Economic Recovery

Bernanke Federal Reserve financial crisis, local time on the 2nd at the Commission’s hearing on the Fed rescue the so-called “big but not down” when the role of the corporate testimony. In addition, the Federal Deposit Insurance Corporation (FDIC) Chairman Bair also attended the hearing to explain its banking operations in the assistance role.

Bernanke and Bayer also stressed that reform of the financial regulatory system is necessary. Bernanke said the financial crisis, the lessons learned, or “not opposing” the problem must be resolved, the current Bernanke and regulatory authorities have already done to prepare in order to prevent the financial crisis broke out again. In addition, Bernanke said the Fed’s low interest rate policy in the past is not a U.S. real estate market bubble formation causes will raise interest rates early side effects of economic recovery. But Bernanke also acknowledged that the Federal Reserve in response to the abuse of subprime slow on action.

It is reported that during the financial crisis, some large enterprises in order to avoid bankruptcy, the U.S. Government, through the nationalization of enterprises sold to competitors, as well as a way to provide the assistance. Bernanke and other U.S. government officials have the view that because these banks have large-scale and not allowed to fail. And Bear Stearns, Merrill Lynch and American International Group, the U.S. government aid have become targets.

However, the former Lehman Brothers CEO Fuld in a prepared written testimony, accused Lehman bankruptcy despite the Fed’s actions exacerbated the financial crisis. Fuld said Lehman bankruptcy before the Fed opened its credit more institutional arrangement tool, but only Lehman not enjoy credit facilities, Lehman Brothers is the only government regulators ordered filed for bankruptcy protection company.

Some analysts also said that starting from Bear Stearns, the Fed Wall Street investment banks to provide much assistance. Some U.S. banking regulators are on the above statement, defended. Counsel Baxter, the New York Fed said that when the U.S. Government did not allow collapse of Lehman Brothers. Bernanke also said there was no one government has enough power to allow Lehman to continue operating, it does not pose a threat to the U.S. and the financial system.

Bernanke for the Fed in the financial crisis in the role, and whether more stringent measures be taken to worry, the Fed is also within the “downtown people shortage.” It is reported that Cohen 1, resigned from his post of vice chairman of the Federal Reserve, the Federal Reserve for over 40 years experience full stop. Cohen’s departure to 7 seats in the Federal Reserve Board has three vacancies occur, Cohen said, the Fed can not only four members in the case of normal operation.

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