Friday, December 4, 2009

Ben Bernanke defended his record as chairman of the Federal Reserve

Ben S. Bernanke on Thursday defended his record as chairman of the Federal Reserve but conceded that the central bank’s lapses contributed to the financial crisis.

“I did not anticipate a crisis of this magnitude,” Mr. Bernanke acknowledged in an occasionally contentious hearing on his nomination for a second term as Fed chairman.

Mr. Bernanke volunteered that the Fed had been “slow” in protecting consumers from high-risk mortgages during the housing bubble and that it should have forced banks to hold more capital for all the risks they were taking on.

“In the area where we had responsibility, the bank holding companies, we should have done more,” he told lawmakers. “That is a mistake we won’t make again.”

As he faced the Senate banking committee on Thursday morning, Mr. Bernanke still seemed to have enough support to win approval for a second term.

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