Bernanke To Remain At The Fed

Obama's Decision Seen As Way To Emphasize Stability

August 26, 2009|By Christi Parsons and Jim Puzzanghera | Christi Parsons and Jim Puzzanghera,Tribune Newspapers

As President Barack Obama announced his decision to renominate Federal Reserve Chairman Ben Bernanke for a second term Tuesday, both men presented a message of stability in the face of a persisting recession.

"The Federal Reserve, like other economic policy makers, has been challenged by the unprecedented economic events of the last few years. ... We have been bold," Bernanke said after the announcement. "If confirmed by the Senate, I will work to the utmost of my abilities ... to help find a solid foundation for growth and stability."

The president emphasized Bernanke's extensive experience and the continuity of his continuing in the job.

"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," Obama said. "But because of his background, his temperament, his courage and his creativity, that's exactly what he has helped to achieve. And that is why I am reappointing him to another term as chairman of the Federal Reserve."

The announcement was well received by some in the business community and in the Senate, where Bernanke was expected to win an easy confirmation though not without facing some sharp questions about whether he responded quickly enough to the mortgage crisis or competently led the bailout of financial firms.

"I still have serious concerns about the Federal Reserve's failure to protect consumers," said Democratic Sen. Chris Dodd of Connecticut, chairman of the Senate Banking Committee. But Dodd said also said he believes that Bernanke is "probably the right choice" for the job.

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., said Bernanke's renomination "makes a lot of sense." "I think he's a very steady hand, a very thoughtful person. I think it was the best choice from the market perspective. He's a known quantity to the markets," said Bair, who has worked with Bernanke on banking regulatory issues and broader economic policy during the financial crisis.

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