Summary
The Federal Reserve's long-held and much-repeated supposition that problems in the sub prime mortgage market would remain contained and not spill over has, of course, proved wrong. Regardless of whether former Fed Chairman Alan Greenspan caused the subprime mortgage mess, as some have alleged, by holding the federal funds rate too low, too long and by failing to crack down on abusive lending practices, his successor Ben Bernanke has to deal with the aftermath. And he has handled the challenge calmly and responsibly. Progress in bringing down core inflation gave the Fed the credibility, and hence leeway, to lean against the credit market headwinds.
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Extract
Bernanke's First 'Crisis'
The Federal Reserve's long-held and much-repeated supposition that problems in the sub prime mortgage market would remain contained and not spill over has, of course, proved wrong. And so what once looked like a predictable, even boring ye...
See the full content of this document
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