Bernanke is Confident of Tools to Tackle the Foreclosure Crisis

Posted on December 8, 2009
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Bernanke is trying to project his candidature as the chairperson of the Federal Reserve for the second term and is confident that he has the tools to tackle the foreclosure crisis. He also has the political backing to take action once the recovery takes firm roots.

Bernanke has been lauded for having a hand in preventing the Great Recession transforming itself into a Great Depression. Nevertheless he is facing sharp criticism from the Congress as well as the public for helping out Wall Street while the man in the street is being crushed under the weight of staggering unemployment or falling incomes and increasing foreclosures.
If his second term is confirmed for another stretch of 4 years, Bernanke promises to cooperate with the Congress to make basic changes in the regulatory infrastructure of the county and to initiate stronger and more efficient overlooking. He gave this assurance to the Senate Banking Committee.
Speaking to the panel he said, “It would be a tragedy if, after all the hardships that Americans have endured during the past two years, our nation failed to take the steps necessary to prevent a recurrence of a crisis of the magnitude we have recently confronted.”

However despite the barrage of criticisms leveled against him and the steps taken by one senator to block confirmation there seems to be no doubt that Bernanke will get the required nomination.

The chairperson of the panel, Sen. Christopher Dodd forecasted that Bernanke would be the winner and be confirmed. He said, “Under your leadership, the Fed has taken extraordinary actions to right the economy. These efforts played, in my view, a very significant role in arresting the financial crisis.”

However Dodd wants to take away from the central bank many of its powers – including supervision of the banks because of the failure of the regulators to prevent rampant practices of mortgage lenders that led to the wave of foreclosures and the financial mayhem.  Dodd, together with others, made a distinction between the operations of the central bank as an institution and the leadership of Bernanke.

Efforts have already kicked off to strengthen supervision of the financial bodies together with the banks. The Federal Reserve is vigorously seeing to the identification and enforcing of improvements said Ben Bernanke. He said, “A financial crisis of the severity we have experienced must prompt financial institutions and regulators alike to undertake unsparing self-assessment of their past performance.”

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