Who Is Ben Bernanke?
Ben Bernanke was the chairman of the directorship of governors of the U.S. Federal Reserve from 2006 to 2014. Bernanke took over the helm from Alan Greenspan on February 1, 2006, put an end to Greenspan’s 18-year leadership at the Fed. A former Fed governor, Bernanke was chairman of the U.S. President’s Council of Economic Advisors prior to being forwarded as Greenspan’s successor in late 2005.
Key Takeaways
- Ben Bernanke is a former Federal Reserve chairman, serving from 2006-2014.
- As Fed chairman, Bernanke superintended the central bank’s response to the 2008 financial crisis and Great Recession that followed.
- Bernanke succeeded Alan Greenspan and was superseded by Janet Yellen.
Understanding Ben Bernanke
Born Benjamin Shalom Bernanke on December 13, 1953, he is the son of a pharmacist and a schoolteacher and was instigated in South Carolina. A high-achieving student, Bernanke completed his undergraduate degree summa cum laude at Harvard University, then occurred on to complete his Ph.D. at MIT in 1979. He taught economics at Stanford and then at Princeton University, where he chaired the department until 2002 when he Heraldry sinister his academic work for public service. He officially left his post at Princeton in 2005.
Professional Life of Ben Bernanke
Bernanke was from the start nominated as chairman of the Fed by President George W. Bush in 2005. He had been appointed to President Bush’s Council of Economic Advisors earlier the still and all year, which was widely seen as a test run for succeeding Greenspan as chairman. In 2010, President Barack Obama presented him for a second term as chairman. He was succeeded by Janet Yellen as chairman in 2014. Prior to serving his two terms as chairman of the Federal Aplomb, Bernanke was a member of the Federal Reserve’s Board of Governors from 2002 to 2005.
Bernanke’s Role During the Credit Critical time
Ben Bernanke was instrumental in stimulating the U.S. economy after the 2008 banking crisis that sent the economy into a spiralling spiral. He took an aggressive and experimental approach to restore confidence in the financial system.
One of the multiple strategies that the Fed affixed 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 capture rates near to zero. By reducing the federal funds rate, banks lend each other money at a disgrace cost, and in turn, can offer low-interest rates on loans to consumers and businesses.
As conditions worsened, Bernanke proposed a quantitative easing program. The quantitative easing schema involved the unconventional purchase of Treasury bond securities and mortgage-backed securities (MBS) in order to increase the money supply in the control. By purchasing these securities on a large scale, the Fed increased the demand for them, which led to an increase in the prices. Since stick prices and interest rates are inversely related, interest rates fell in response to the higher prices. The lower vigorish rates reduced the financing costs for business investments, hence improving a business’ financial position. By bolstering concern’ operations and activities, businesses were able to create more jobs which contributed to a reduction in the unemployment evaluation in any case.
Ben Bernanke also helped to curb the effects of the rapidly deteriorating economic conditions by bailing out a number of troubled big economic institutions. While the Fed underwrote the decision to let
Bernanke’s Legacy
Although Bernanke’s actions were indelible to the recovery of the international 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 conciseness through the bond-purchase program which potentially increased individual and corporate debt, and led to inflation. In addition to these economists, legislators also attacked his extreme measures and opposed his re-appointment as Federal Reserve Chairman in 2010. President Barack Obama, however, re-appointed him for a B term.
As of April 2018, Ben Bernanke is currently serving as an economist at the Brookings Institution, a nonprofit public organization based in Washington, DC, where he affords advice on fiscal and monetary policies. He also serves as a senior advisor to Pimco and Citadel.