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Bernanke Nominated for Fed Chairman

President Obama, while vacationing on Martha's Vineyard in Massachusetts, announced Tuesday morning that he nominated Ben Bernanke for a second four-year term as head of the Federal Reserve.

Obama opened his announcement by saying that Bernanke "has led the Fed through one of the worst financial crises that this nation and the world has ever faced. As an expert on the causes of the Great Depression, I'm sure Ben never imagined that he would be part of a team responsible for preventing another."

The President credited the Fed Chief's "background, his temperament, his courage, and his creativity" for stabilizing "financial system on the verge of collapse" and his "bold action and out-of-the-box thinking that has helped put the brakes on our economic free fall."

The president pointed to signs that the auto industry, business investment and the housing and credit markets are stabilizing, but added that "we are a long way away from completely healthy financial systems and a full economic recovery."

"The actions we've taken to stabilize our financial system, repair our credit markets, restructure the auto industry and pass a recovery package have all been steps of necessity, not choice. They've faced plenty of critics, some of whom argued that we should stay the course or do nothing at all. But taken together, this bold, persistent experimentation has brought our economy back from the brink. They are steps that are working," Obama said.

Obama reiterated that we are still a long way off from a full economic recovery. "That's why we need Ben Bernanke to continue the work he's doing, and that's why I've said that we cannot go back to an economy based on over-leveraged banks, inflated profits, and maxed-out credit cards," Obama said.

"Part of that foundation has to be a financial regulatory system that ensures we never face a crisis like this again. We've already seen how lax enforcement and weak regulation can lead to enormous wealth for a few and enormous pain for everybody else," Obama said. "And that's why even though there is some resistance on Wall Street from those who would prefer to keep things the way they are, we will pass the reforms necessary to protect consumers, investors, and the entire financial system. And we will continue to maintain a strong and independent Federal Reserve."

Mr. Bernanke thanked the president for showing his confidence through the nomination. He expressed gratitude for the privilege to serve with his "extraordinary colleagues" and said that they've "demonstrated remarkable resourcefulness, dedication, and stamina under trying conditions." Bernanke said, "Through the long nights and weekends and the time away from their families, they have never lost sight of the critical importance of the work of the Fed for the economic well-being of all Americans." The Fed Chief also thanked his family for "their support and sacrifice."

The Senate will have to confirm the nomination. Senate Banking Committee Chairman Chris Dodd (D-CT) said in a prepared statement, "While I have had serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice. Chairman Bernanke was too slow to act during the early stages of the foreclosure crisis, but he ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets."

"There will be a thorough and comprehensive confirmation hearing," Dodd stated. "I still have serious concerns about the Federal Reserve’s failure to protect consumers and I strongly believe these responsibilities should go to an independent consumer financial protection agency. I expect many serious questions will be raised about the role of the Federal Reserve moving forward and what authorities it should and should not have."

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Thursday, 09 July 2020

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