ben bernanke was the chair of the board of governors of the u s federal reserve from 2006 to 2014 bernanke took over the helm from alan greenspan on feb 1 2006 ending greenspan s 18 year leadership at the fed 1
a former fed governor bernanke was chair of the u s president s council of economic advisors prior to being nominated as greenspan s successor in late 2005 investopedia alison czinkotaearly life and educationborn benjamin shalom bernanke on dec 13 1953 he is the son of a pharmacist and a schoolteacher and was raised in south carolina 2 a high achieving student bernanke completed his undergraduate degree summa cum laude at harvard university and then completed his ph d at mit in 1979 3he taught economics at stanford and then at princeton university where he chaired the department until 2002 when he left his academic work for public service 3 he officially left his post at princeton in 2005 4notable accomplishmentsbernanke was first nominated as chair of the fed by president george w bush in 2005 5 he had been appointed to president bush s council of economic advisors earlier the same year which was widely seen as a test run for succeeding greenspan as chair 6in 2009 president barack obama nominated him for a second term as chair 7 he was succeeded by janet yellen as chair in 2014 before serving his two terms as chair of the federal reserve bernanke was a member of the federal reserve s board of governors from 2002 to 2005 1ben bernanke was instrumental in stimulating the u s economy after the 2008 banking crisis that sent the economy into a downward spiral he took an aggressive and experimental approach to restore confidence in the financial system one of the multiple strategies that the fed applied to curb the global crisis was enacting a low rate policy to stabilize the economy under the tutelage of bernanke the fed slashed the benchmark interest rates near to zero by reducing the federal funds rate banks lend each other money at a lower cost and in turn can offer low interest rates on loans to consumers and businesses 8the total net worth american households lost between 2007 and 2009 of the great recession 9as conditions worsened bernanke proposed a quantitative easing program the quantitative easing scheme involved the unconventional purchase of treasury bond securities and mortgage backed securities mbs to increase the money supply in the economy 8 by purchasing these securities on a large scale the fed increased the demand for them which led to an increase in the prices since bond prices and interest rates are inversely related interest rates fell in response to the higher prices the lower interest rates reduced the financing costs for business investments hence improving a business financial position by bolstering operations and activities businesses were able to create more jobs which contributed to a reduction in the unemployment rate ben bernanke also helped to curb the effects of the rapidly deteriorating economic conditions by bailing out several troubled big financial institutions while the fed underwrote the decision to let lehman brothers fail they bailed out companies such as aig insurance due to the higher risk that the bailed out companies posed if they went bankrupt 10in the case of aig bernanke believed that the company s huge liability was solely isolated in its financial products which involved hundreds of billions of dollars in derivatives speculation if the company lost out on its speculative position on these derivatives it would not have sufficient funds to pay out or cover its losses 11 for companies like merrill lynch and bear stearns the federal reserve incentivized bank of america and jpmorgan to purchase and take over both companies by guaranteeing the bad loans of the troubled banks 1213published worksin 2013 bernake released the federal reserve and the financial crisis a compilation of his lectures about the history of the federal reserve and the financial crisis of 2008 it features his insights on the fed s activities decisions and responses to events 14two years later he published the courage to act a memoir of a crisis and its aftermath chronicling his experiences as the chairman of the federal reserve board and exposed how close the global economy came to collapsing in 2008 stating that it would have done so had the federal reserve and other agencies not taken extreme measures 15 president barack obama has also stated that bernanke s actions prevented the financial crisis from becoming as bad as it could have been 7 however bernanke has also been the subject of critics who claim he didn t do enough to foresee the financial crisis legacyalthough bernanke s actions were indelible to the recovery of the global economy he faced criticism for the approaches that he took to achieve this recovery economists criticized his pumping hundreds of billions of dollars into the economy through the bond purchase program which potentially increased individual and corporate debt and led to inflation in addition to these economists legislators also criticized his extreme measures and opposed his re appointment as federal reserve chair in 2010 16 president barack obama however reappointed him for a second term as of august 2022 ben bernanke is currently serving as an economist at the brookings institution a nonprofit public organization based in washington dc where he provides advice on fiscal and monetary policies 3 he also serves as a senior advisor to citadel 17