Federal Reserve Chairman Ben Bernanke says that although the economy is recovering, economic growth will be moderate and increase very slowly into 2010. (0:24)

 

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Federal Reserve Chairman Ben Bernanke says the recession is over but its effects will still be felt in terms of job security and wages. (0:20)

 

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Federal Reserve Chairman Ben Bernanke said Tuesday that regulatory problems were a large part of the world-wide financial meltdown and that he believes reform is necessary. (0:43)

 

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Leah Valencia, University of New Mexico-Talk Radio News Service

Federal Reserve Chairman Ben Bernanke announced the end of the recession Tuesday, but conceded that the U.S. will continue to feel its effects.

“From a technical perspective, the recession is very likely over at this point,” he said. “[But] it is still going to feel like a very weak economy for some time,” said Bernanke during a speech at the Brookings Institute.

Bernanke warned that though the U.S. is leaving the recession behind, unemployment and low wages will continue to take their toll. He added that markets will remain weak through 2010, because economic growth will not be strong enough to create jobs.

“Unemployment will be slow to come down,” he said. “It will come down, but it may take some time.”

The bankruptcy of the Lehman Brothers occured exactly a year before Bernanke’s speech on Tuesday, marking the worst phase of the global financial crisis.

Bernanke said regulatory reform is needed to ensure that a crisis such as this does not reoccur.

“This has just been too big of a calamity and too serious of a problem.”

President Barack Obama delivered a similar message during a street to New York’s financial community Monday.

While there has been some debate among policymakers over whether effective regulatory reform can make it through Congress, Bernanke remarked Tuesday that he was hopeful.

“I remain pretty optimistic that… reform will be forthcoming,” Bernanke said.

By Justin Duckham-Talk Radio News Service

President Barack Obama interrupted his vacation in Martha’s Vineyard Tuesday to nominate Ben Bernanke to a second term as Federal Reserve Chairman.

Bernanke, who was initially appointed to the position by President Bush in 2006, was credited by Obama with preventing additional damage to the troubled U.S. economy.

“Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall,” Obama said. “Almost none of the decisions that he or any of us made have been easy.”

The President went on to promise an overhaul of the financial regulatory system, describing it as a necessary step for economic recovery.

Bernanke will face a Senate confirmation hearing before embarking on his second term. Chairman of the Senate Banking Committee Chris Dodd released a statement Monday saying that although he believed Bernanke was the right choice, the Federal Reserve Chairman will nevertheless face a thorough review from the Committee. (6:18)

 

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By Courtney Ann Jackson- Talk Radio News Service

Financial conditions are strained but have improved, according to the Federal Reserve Chairman Ben Bernanke’s semiannual Monetary Policy Report to Congress.

“Today, financial conditions remained stressed, and many households and businesses are finding credit difficult to obtain. Nevertheless, on net, the past few months have seen some notable improvements,” Bernanke said Wednesday before the Senate Committee on Banking, Housing, and Urban Affairs.

Bernanke cited the narrowing spread of interest rates in short-term money markets, adding that equity prices are nearly beginning to recover to their levels from the end of last year. Bernanke also noted that the banks have raised “significant amounts of new capital.”

According to the Chairman, many of these improvements are due, in part, to policy actions by the Federal Reserve to encourage the flow of credit.

“Some banks are still short of capital, other banks are concerned about future losses, they’re concerned about the weakness in the economy and the weakness of potential borrowers,” said Bernanke. “Banks should be making loans to credit-worthy borrowers. It’s in their interest, the bank’s interest, as well as the interest of the economy and we’re working with banks to make sure they do that.”

During questioning, Bernanke explained to Committee members that consumer protection, transparency, and accountability continued to be priorities for the Federal Reserve.

Chairman of the House Committee on Oversight and Government Reform Edolphus Towns summarized the current controversy surrounding the Bank of America Merrill Lynch merger in his opening statements for a hearing with Federal Reserve Chairman Ben Bernanke. (1:03)

 

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Chairman of the Federal Reserve Ben Bernanke responds to Chairman Edolphus Towns question about why federal reserve employees were not completely forthcoming regarding information about the Bank of America Merrill Lynch merger. (1:02)

 

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By Learned Foote- Talk Radio News Service

Congressman Ron Paul (R-Texas) recently introduced the Federal Reserve Transparency Act to House, a piece of legislation that calls for a stronger audit of the Federal Reserve along with a “detailed report to Congress.” The bill currently has 241 co-sponsors.

During a forum at the Cato Institute, Paul said he originally decided to run for Congress in the 1970s due to his interest in monetary policy, which is conducted by the Federal Reserve. “I’ve been talking about it for decades, and arguing that we had a financial system that was very fryable, very vulnerable, and it was the Fed that was creating the bubbles. Therefore we should be looking into it and preventing these problems rather than waiting for cataclysmic financial crisis to hit.”

Gilbert Schwartz, Former Associate General Counsel to the Federal Reserve, appeared alongside Paul, argued that the Fed is responsible for the financial crisis to some degree, he praised the “flexibility that the Federal Reserve exhibited in terms of their willingness to make sure that the economy—not just the U.S. economy, but also the world financial system—did not collapse.”

Schwartz went on to explain that the Fed understands the growing demand for transparency. He cited recent financial statements released by the Fed, saying, “clearly the message is getting to the Fed, and… this indicates at least some degree of attempt by the Fed to: one, be responsive to that criticism, and number two, probably to thwart the legislation that would otherwise subject them to GAO [U.S. Government Accountability Office] audit.”

Paul said that his bill will “open the books,” but not necessarily affect monetary policy. “It’s less confrontational for those who want to design regulations and deal with with monetary policy, and I think that’s why we’re getting such bipartisan support.” Paul believes, however, that if the audit is conducted, public opinion will turn against the Fed and monetary policy will be substantially challenged.

Ron Paul attributed the bills’ support to the changing landscape of the economic system. “It had to do with the TARP funds,” Paul explained. “There are a few spammers out there that are interested in what I’ve been doing, and they’re letting their Congressmen know.”