Ben Bernanke
Ben Bernanke
Ben Shalom Bernankeis an American economist at the Brookings Institution who served two terms as chairman of the Federal Reserve, the central bank of the United States, from 2006 to 2014. During his tenure as chairman, Bernanke oversaw the Federal Reserve's response to the late-2000s financial crisis. Before becoming Federal Reserve chairman, Bernanke was a tenured professor at Princeton University and chaired the department of economics there from 1996 to September 2002, when he went on public service leave...
NationalityAmerican
ProfessionPolitician
Date of Birth13 December 1953
CityAugusta, GA
CountryUnited States of America
Most of the policies that support robust economic growth in the long run are outside the province of the central bank.
History proves... that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.
In a mature economy like India's, which is becoming modern and a financially-oriented economy, an independent central bank, responsible central bank, is really central to success.
The actions taken by central banks and other authorities to stabilize a panic in the short run can work against stability in the long run if investors and firms infer from those actions that they will never bear the full consequences of excessive risk-taking.
Since World War II, inflation - the apparently inexorable rise in the prices of goods and services - has been the bane of central bankers.
At the most basic level, a central bank must be clear and open about its actions and operations, particularly when they involve the deployment of public funds.
Central bankers got it right in the United States in 1987 when they avoided deflationary pressures as well as serious trouble in the banking system.
As you know, in the latter part of 2008 and early 2009, the Federal Reserve took extraordinary steps to provide liquidity and support credit market functioning, including the establishment of a number of emergency lending facilities and the creation or extension of currency swap agreements with 14 central banks around the world.
The one thing people don't appreciate, I think, is that central banking is not a new development. It's been around for a very long time.
After a long period in which the desired direction for inflation was always downward, the industrialized world's central banks must today try to avoid major changes in the inflation rate in either direction.
Under constrained discretion, the central bank is free to do its best to stabilize output and employment in the face of short-run disturbances, with the appropriate caution born of our imperfect knowledge of the economy and of the effects of policy (this is the 'discretion' part of constrained discretion),
Clear communication is always important in central banking, but it can be especially important when economic conditions call for further policy stimulus but the policy rate is already at its effective lower bound.
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.
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.