Ben Bernanke, chairman of the Federal Reserve, gave a speech this week that made headlines and raised eyebrows: “Lax Oversight Caused the Crisis, Bernanke Says.” Finally, many thought, the Fed Chairman would fess up to his role in the crisis! Alas, 98 percent of the speech is dedicated to justifying what the Fed did right over the last decade, and the “lax oversight” apparently had more to do with other agencies charged with regulating mortgages and underwriting practices, not his own.
News Articles By Mary Bottari
By any measure, the last decade was a rotten one. It started with a stolen election and the worst terrorist attack in American history. It is ending this week with the United States mired in two wars and deep into a catastrophic recession.
It’s hard to imagine that the next decade could be worse, but could it?
More than a year after reckless Wall Street gambling collapsed the economy, no employee of a major American bank or financial institution is behind bars. This fact is all the more astounding when it comes to AIG.
AIG was at the heart of the financial meltdown. Their "innovative" use of risky credit default swaps (a type of insurance policy on bonds) helped transform boring bond trading into a highly leveraged, high-velocity global business.
Bank bonuses are due to be announced. Perhaps, in the dead of night on Friday. The Wall Street Journal has already reported that they expect the total to top $140 billion. This is a record high and it was only possible because regulators flooded Wall Street with $3 trillion in cash, loans, guarantees and other forms of taxpayer support.
One of the major flaws with the financial reform bill that passed the House last week is that it does nothing to stop behemoth banks from growing even bigger.
Today, the House voted on a long-awaited financial reform package. House Speaker Nancy Pelosi announced: "The legislation says very clearly to Wall Street: the party is over." But is it?
There was some good news out of Washington for a change. The President hosted a high-profile summit on jobs and Congress started work on a Wall Street speculation tax to help pay for a new jobs bill.
Led by Oregon Representative Pete DeFazio and Iowa Senator Tom Harkin, a group of lawmakers introduced a measure sure to drive Wall Street crazy.
Last week, Ben Bernanke, the head of the Federal Reserve, came before the Senate Banking Committee for a confirmation hearing. Bernanke was nominated by President Bush for a four year term beginning in 2006. President Obama chose to continue with Bernanke and re-nominated him this year for another four year term.