An article by Fed chairman Bernanke is published on WSJ. It gives a window on his mind with regard to financial crisis. Some comments:

1. His aim is to FIRST (ONLY?) to repair and reform financial system
2. Economy is only a consequence of point 1. No direct work on economy.
3. Bernanke has many doubts and uncertainties about the whole situation and the future. One would have expected more clarity and certainty from him (at least in the article). If the Fed chairman is not clear about the future and does not address the economy directly, how could business owners and CEOs feel confident to put money in business expansions?

PS: What did Bernanke mean by "we will not stand down"? Does he mean himself or the Fed as an institution. If he is referring to himself, that would be an insult to those who appointed him. Is he suggesting/signaling that he cannot he be removed? Should he have been more specific about the use of words "we will not stand down".

Few excerpts from WSJ Bernanke article follow:

As Americans well know, the challenges we now face in the financial markets and in the economy are both extraordinarily complex and historic in scope. I firmly believe, however, that with the actions policy makers are announcing today, we will be able to meet those challenges.

Our strategy will continue to evolve and be refined, and we will adapt to new developments and the inevitable setbacks. But we will not stand down until we have achieved our goals of repairing and reforming our financial system, and thereby restoring prosperity to our economy.

........


I am not suggesting the way forward will be easy. But the tools are in place to respond effectively and with force. These tools will bolster the capital of our financial institutions, restore confidence in their debt, and offer increased access to funding for businesses. Their application, together with the underlying power and resilience of the American economy, will help to restore confidence to our financial system and place our economy back on a path to vigorous growth.

1 comments

  1. Anonymous  

    November 10, 2008 at 5:19 PM

    _YOU_ are a tool.

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