Bernanke likens '08 financial crisis to car crash

Published on NewsOK Modified: January 16, 2014 at 1:31 pm •  Published: January 16, 2014
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WASHINGTON (AP) — In his final public appearance as chairman of the Federal Reserve, Ben Bernanke took a moment to reflect on the 2008 financial crisis and compared it to surviving a bad car crash.

During an interview Thursday at the Brookings Institution, Bernanke recalled some "very intense periods" during the crisis, similar to trying to keep a car from going over a bridge after a collision.

The government had just taken over mortgage giants Fannie Mae and Freddie Mac. Lehman Brothers had collapsed. He recalled some sleepless nights working with others to try and contain the damage.

"If you're in a car wreck or something, you're mostly involved in trying to avoid going off the bridge. And then, later on, you say, 'Oh my God!'" Bernanke said.

Bernanke will leave the Fed on Jan. 31 after eight years as chairman. His successor, Janet Yellen, will take over on Feb. 1.

In his appearance, Bernanke defended the Fed's efforts during the crisis, which included massive purchases of Treasury bonds to push long-term interest rates lower and forward guidance to investors about how long the Fed plans to keep short-term interest rates near zero.

Critics have warned that those efforts pose great risks for higher inflation or future financial market turmoil.

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