Benu Bernanke was given a second term

Source: AP

The specialist in economic depression, Benu Bernanke, had a chance to finally overcome one of them, the American Senate approved the head of the US Federal Reserve (Fed) Bena Bernanke for the second four -year term. The re -election was seen for him especially after last year President Barack Obama nominated his candidacy. However, this week, re -election were questioned by the Senate. Now the head of the Fed will have to prove that he can not only pump up the economy in time with money, but also cope with their overabundance.

A graduate of Harvard University, a former teacher of Princeton, specializing in the times of the great depression, was unlikely to once assume that he would be called the Time magazine (in 2009) the “man of the year” for the fact that he would have to save the American economy from the most cruel crisis since the very times. Economists admit that the path of pumping financial markets he elected money liquidity helped America to recapitalize the credit system, which was a priority in the acute phase of the crisis.

“Whether the US Federal Reserve has a different way out at that moment, it is unlikely that anyone can say now,” says Pavel Pikulev, analyst of Trust NB. “It is definitely that it was important to act, and Ben Bernanke was better prepared for such decisive actions than anyone.”

Lavra and thorns

Putting the candidacy of Ben Bernanke for a second term, President Obama said that the head of the Fed “demonstrated the wisdom and stamina of the leader in the midst of the financial and economic crisis”. On Thursday, he said that "he was satisfied with a wide bipartisan vote in the Senate according to Ben Bernanke for the next period by the chairman of the Federal Reserve System." In support of the candidacy of the head of the Fed, 70 members of the upper house of Congress were expressed, against - 30, the Bloomberg agency said.

Despite the re -election by a majority vote, there has been a lot of criticism of Bernanca recently. This week, several influential senators spoke out against its reassignment, saying that he did not save the economy, but, on the contrary, just heated it with freshly printed money, which now unknown how to get rid of. Bernanke is also criticized for investing huge budget funds in the salvation of the American International Group and Citigroup.

A person who can click

Last year, the name Ben Bernanke fell into the center of the scandal caused by the merger of Bank of America (BOFA) and Merrill Lynch banks in 2008. Bofa agreed to buy Merrill Lynch on September 15, 2008. And in February 2009, BOFA CEO Kenneth Lews was called to the prosecutor's office on the issue of bonuses in the amount of $ 3.6 billion, which were paid to Merrill Lynch employees a few days before the transaction. According to Lews, he learned about the financial situation of Merrill Lynch on December 12, 2008 and wanted to refuse the deal. However, according to him, Ben Bernanke and Minister of Finance Henry Paulson “pressed” him and demanded that the shareholders of information about the financial situation Merrill Lynch also demanded.

Complex tasks

One way or another, but now it is Benu Bernanke that as the head of the Fed will have to cope with the consequences of anti -crisis actions.

“The US has a huge budget deficit, and the government plans to reduce budget expenses by several years, in which the Fed can take an active part,” says BKS-Express analyst Andrei Dirgin.
“Also a difficult question is the withdrawal of excess liquidity from the market,” says Pavel Pikulev. “Of course, the Fed has a set of funds for this, such as direct repo operations or interest on the residues on the cards, but to predict how effective all this is is not yet possible.”

This year, the Fed will have to decide when it is worth starting an increase in the basic interest rate of refinancing, which has been in the United States at the minimum level since December 2008.

It is worth noting that the authority of the Fed’s itself during the crisis was somewhat undermined. The fact is that the American Central Bank is a non -state private organization. The independence of the emission center from the executive branch has always been explained by the desire to both ensure the balance between taxpayers and the government, and to prevent the possibility of using monetary issuance in the short -term interests of the US government. The fact that this traditional balance in the crisis was broken. And the criticism of the Fed is based.

The Fed is ...

The US Federal Reserve was created in 1913 by the Federal Reserve Law. A performs the functions of the Central Bank of the United States. Despite the fact that the state plays a large role in the management of the Fed, the form of ownership of Fedrezrva is a private shareholder with a special status of shares. The Fed’s structure includes 12 regional reserve banks and numerous banks receiving the Fed shares in exchange for the submitted reserve capital. By law, any commercial bank that meets the standard requirements of the Fed can be a shareholder of its local regional branch. Prior to the crisis, the Fed’s structure included 38% of all banks and credit unions in the United States.

As many now believe in the USA, the Fed must focus not on the support of financial institutions, but on the support of citizens. According to Senator-Democrat Sheldon Whitehaus, the Fed "It is time to begin to use its huge potential to help people." According to the former Fed’s employee Vincent Rainhart, attacks by legislators from both political parties have become the test of independence of this financial institution.

“However, the criticism of the Fed and Ben Bernanke is currently more populist in nature,” Andrei Dirgin is sure. “Essentially, the professional community of the policy of Bernanke is evaluated as very successful,” the expert notes. In addition, according to him, the TARP program brought good dividends to the budget.