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Bernanke Takes Blame - Finally Admits He Was Muddled

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Bernanke takes blame for muddled message on Lehman

U.S. Federal Reserve Chairman Ben Bernanke said he was partly to blame for leaving the wrong impression that the central bank could have saved Lehman Brothers from failure in 2008.

Bernanke, testifying on Thursday before a congressional commission examining the causes of the worst financial crisis in 80 years, said he thought it "very likely" the investment bank was insolvent and lacked sufficient collateral to borrow enough from the central bank to avert collapse.

But he said he kept that view to himself in congressional testimony given just days after Lehman's September 2008 bankruptcy because he was worried that such comments might have spooked already panicky financial markets.

"I regret not being more straightforward there because clearly it has supported the mistaken impression that in fact we could have done something we could not have done," he said.

The Financial Crisis Inquiry Commission wrapped up a two-day session on Thursday focussing on "too big to fail" firms whose disorderly collapse could destabilize the global economy.

On Wednesday, commission Chairman Phil Angelides questioned whether politics had played a role in the decision not to bail out Lehman Brothers, citing emails showing U.S. officials fretting over how the media might portray a taxpayer-funded rescue of a Wall Street titan. Lehman's bankruptcy triggered widespread panic, hastening the worst global recession since World War Two. (link.reuters.

"It was with great reluctance and sadness I conceded that there was no other option" but to let Lehman fail, Bernanke said. "The only way we could have saved Lehman would have been by breaking the law and I'm not sure I'm willing to accept those consequences for the Federal Reserve and for our system of laws."

The central bank serves as the lender of last resort for banks in financial difficulty, but it is required to lend against good collateral. Bernanke said it was the "unanimous opinion" of New York Fed lawyers and leadership that Lehman did not meet that requirement.

Unfortunately it's not for his role in the financial collapse.

Denniger will be blowing a blood vessel at his comments the Fed wouldn't act illegally against the laws of the land, he's convinced they are.

Still is this the first baby step in the admission that he's really muddled and out of his depth?

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Bernanke takes blame for muddled message on Lehman

Unfortunately it's not for his role in the financial collapse.

Denniger will be blowing a blood vessel at his comments the Fed wouldn't act illegally against the laws of the land, he's convinced they are.

Still is this the first baby step in the admission that he's really muddled and out of his depth?

No muddling here, just plain deception. However, at the time, it was easier for the sheeple to believe that the Fed chose to let a bad bank go, rather than being stood on the sideline watching helplessly....

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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