Bernanke announces Transparency Initiatives for the Fed

Federal Reserve Board Chairman Ben Bernanke spoke Wednesday at the National Press Club about the Fed’s lending programs and balance sheet. Bernanke spoke about the tool kit used by the Federal Reserve to battle the economic crisis the country is facing. He said that the tools the Fed had at its disposal were programs that would promote liquidity for both financial institutions and money market mutual funds. He said that transparency of the system was important, for democratic reasons, but also to make sure people working with the market understand the system, to encourage the most effective market activity. With this in mind, the Chairman announced two initiatives that the Federal Reserve would be undertaking, the first of which was establishing a new website to educate and inform the public on relevant financial issues within the federal government. This website would consolidate all of the information previously provided by the Fed into one easily accessible place, and would provide explanations on all of it. Additionally, the Fed is going to review current publication and disclosure policies to ensure the public has access to information they “have a right to know”.

Concerning the President’s economic stimulus plan, Bernanke said that he cannot talk about specific components and apportionments, because those are up to the administration and legislators. He did say, however, that there were two necessary parts to recovery: financial stimulus to get the economy moving, and a stabilization of the financial systems. Several times he emphasized the importance of these two components, saying that the other programs will not work without these two pillars. The efforts to get the economy moving again will also specifically help small business, said Bernanke. He went on to say that the country should maintain a level of inflation that finds a balance between maximum employment and price stability over time. He saw very little risk of “unacceptably high” inflation in the short term.

By Michael Ruhl, University of New Mexico – Talk Radio News Service