In the event, of course, the bursting of the housing bubble helped trigger the most severe financial crisis since the Great Depression. The Federal Reserve, like other central banks, wields powerful tools; democratic accountability requires that the public be able to see how and for what purposes those tools are being used.
The experience has led to important changes at our institution, including new monetary policy tools, enhanced policy communication, a substantial increase in the institutional focus on financial stability and macroprudential policy, and increased transparency. To illustrate the extent of fiscal tightness, at the current point in the recovery from the recession, employment at all levels of government had increased by nearlyworkers; in contrast, in the current recovery, government employment has declined by more thanjobs, a net difference of more than 1.
And so it is that you have two types of chairmen: The increases in policy transparency that were achieved proved valuable during a very difficult period for monetary policy. However, to a significant extent, our expectations about the possible macroeconomic effects of house price declines were shaped by the apparent analogy to the bursting of the dot-com bubble a few years earlier.
Some of these factors were difficult or impossible to anticipate, such as the resurgence in financial volatility associated with the European sovereign debt and banking crisis and the economic effects of natural disasters in Japan and elsewhere.
The ideal situation for investors is one where business is allowed as much room for growth as possible. If finance was a religion, Greenspan was the pope. We took another important step in Januarywhen the FOMC issued a statement laying out its longer-run goals and policy strategy.
Here we will show the highs and lows of one of the most memorable Fed chairmen and discuss how his actions affected everyone from Presidents to the common man. The Treasury can use surplus tax dollars to either purchase U.
As part of the Fed's interaction with the Congress, we have also routinely provided staff briefings on request and conducted programs at the Board for the benefit of congressional staff interested in Federal Reserve issues. Although growth prospects for the emerging markets continue to be good, here too the extent and effectiveness of structural reforms, like those currently under way in China and Mexico, will be critical factors.
I am very proud of my colleagues at the Fed for the hard work and creativity they have brought to bear in addressing the financial and economic crisis, and I think we and they have been well served by a culture that emphasizes objective, expert analysis; professionalism; dedication; and independence from political influence.
Subsequent efforts focused on rebuilding the public's confidence, notably including public guarantees of bank debt by the Federal Deposit Insurance Corporation and of money market funds by the Treasury Department, as well as the injection of public capital into banking institutions. As an investor, you probably want lower interest rates in order to maximize corporate profit and, therefore, your own returns.
Yet another possibility is weak productivity growth reflects longer-term trends largely unrelated to the recession. But the current policy mix is particularly problematic when interest rates are very low, as is the case today.
Greenspan's biggest mistake was not an interest hike or cut, but a comment he made when President George W.
Thus, Wall Street and Greenspan often found themselves at odds.[Federal Reserve Chairman] Ben Bernanke, at the urging of the Democrats in Congress and after we had passed a bill in the House, used exactly the same authority from that act that Greenspan.
Sep 06, · The White House is quietly searching for the successor to Federal Reserve Board Chairman Alan Greenspan by checking with Wall Street executives and business leaders to.
Board of directors, consisting of seven members appointed by the president, in charge of policies for the Federal Reserve System. Federal Reserve System Network of U.S. government banks that loan money to and regulate the commercial behavior of private banks.
May 19, · Federal Reserve Board Chairman Alan Greenspan and other governors at the Fed eventually departed from Reagan's injunction that monetary policy. Washington: Board of Governors of the Federal Reserve System, November.
Kiley, Michael T. (). "Monetary Policy Statements, Treasury Yields, and Private Yields: Before and after the Zero Lower Bound," Finance and Economics Discussion Series Washington: Board of Governors of the Federal Reserve System, January (forthcoming a).
Sep 19, · Ben Shalom Bernanke was Chairman of the Board of Governors of the Federal Reserve System from February 1,to January 31, He replaced Alan Greenspan.
He replaced Alan Greenspan. Congress appointed Bernanke for his knowledge of how monetary policy contributed to the Great Depression and his belief in inflation targeting.Download