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Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.

Ben Bernanke

The crisis in Europe has affected the US economy by acting as a drag on our exports, weighing on business and consumer confidence and pressuring US financial markets and institutions.
BEN BERNANKE

Acting Country Financial Lace
The sources of deflation are not a mystery. Deflation is in almost all cases a side effect of a collapse of aggregate demand.. a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.
BEN BERNANKE

Cutting Ongoing Order
If you are asking me if I would advocate that the Chinese go to greater flexibility in their exchange rate, I certainly would.
BEN BERNANKE

Asking Chinese Rate
Every effort needs to be made to try and offset the costs of Katrina and Rita by reductions in other government programs, especially those that are wasteful, duplicative and ineffective.
BEN BERNANKE

Effort Government Trying
Economics is a very difficult subject. I’ve compared it to trying to learn how to repair a car when the engine is running.
BEN BERNANKE

Car Running Trying
It is not the responsibility of the Federal Bank – nor would it be appropriate – to protect lenders and investors from the consequences of their decisions
BEN BERNANKE

Decision Economics Responsibility
Under a cold turkey strategy, at each policy meeting the Federal Open Market Committee would make its best guess about where it ultimately wants the funds rate to be and would move to that rate in a single step.
BEN BERNANKE

Committee Country Moving
Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
BEN BERNANKE

Depression Financial Great Result
The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.
BEN BERNANKE

Lessons Long Recovery
House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.
BEN BERNANKE

Fundamental Past Strong Years
The GSEs are adequately capitalized. They are in no danger of failing.
BEN BERNANKE

Capitalized Danger Failing
The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.
BEN BERNANKE

Demand Path Risk
Both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.
BEN BERNANKE

Humanity Incentives Today
I assure this committee that, if I am confirmed, I will be strictly independent of all political influences… essential to that institution’s ability to function effectively and achieve its mandated objectives.
BEN BERNANKE

Essentials Independent Political
A gold standard doesn’t imply stability in the prices of the goods and services that people buy every day, it implies a stability in the price of gold itself.
BEN BERNANKE

Gold People Standard
A money-financed tax cut is essentially equivalent to Milton Friedman’s famous ‘helicopter drop’ of money.
BEN BERNANKE

Cutting Helicopters Milton
In the future, my communications with the public and with the markets will be entirely through regular and formal channels.
BEN BERNANKE

Communication Formal
Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand
BEN BERNANKE

Growth Long Running
If your uniform isn’t dirty, you haven’t been in the game.
BEN BERNANKE

Dirty Game Graduation
I am very proud of my nerd-dom.
BEN BERNANKE

Doms Nerd Proud
The more important reason is that the research itself provides an important long-run perspective on the issues that we face on a day-to-day basis.
BEN BERNANKE

Issues Perspective Running
Indeed, in general, healthy investment returns cannot be sustained in a weak economy, and of course it is difficult to save for retirement or other goals without the income from a job.
BEN BERNANKE

Goal Job Retirement
It’s true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.
BEN BERNANKE

Circles Political Pressure
The amount of currency in circulation is not changing. The money supply is not changing in any significant way.
BEN BERNANKE

Currency Significant Way
The Federal Reserve will not monetize the debt.
BEN BERNANKE

Debt Federal Reserve Reserves
Over the years, the U.S. economy has shown a remarkable ability to absorb shocks of all kinds, to recover, and to continue to grow.
BEN BERNANKE

Kind Success Years
Our mission, as set forth by the Congress is a critical one: to preserve price stability, to foster maximum sustainable growth in output and employment, and to promote a stable and efficient financial system that serves all Americans well and fairly.
BEN BERNANKE

Employment Financial Growth

Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.

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Popular Authors

Among the largest banks, the capital ratios remain good and I don’t expect any serious problems . . . . among the large, internationally active banks that make up a very substantial part of our banking system.

Related Topics

Popular Authors

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