Tags: Money | Federal Reserve | Bernanke | moves

8 Top Fed Moves Under Ben Bernanke

By    |   Friday, 10 July 2015 11:33 PM

Ben Bernanke, who headed the Federal Reserve from 2006 to 2014, struggled with a national financial crisis and global recession that began with the economic meltdown in 2008. Despite criticism and questions about his handling of the crisis, he was nominated by President Barack Obama and approved by Congress for a second term in 2010.

Here are eight top Fed moves that occurred during Bernanke’s two terms.

1. Under Bernanke, the Fed lowered interest rates 10 times, dropping the federal funds rate from 5.25 percent to 0 percent between September 2007 and December 2008, according to About.com.

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2. Bernanke lowered requirements and discount rates for banks to promote short-term lending to help boost a slowing economy.

3. The Fed loaned billions of dollars to banks to take on bad debt as collateral through Bernanke’s Term Auction Facility, which was created in 2007. By June 2008, the loans peaked at $1 trillion.

4. Bernanke provided $180 billion in credit for banks, which began freezing credit for fear of lending as the problems with sub-prime mortgages emerged. The banks were able to get money for overnight or short-term lending.

5. Bernanke supported the $150 billion bailout of the AIG insurance firm and the takeover of Bear Stearns and JP Morgan Chase in the government’s efforts to repair financial institutions, according to Biography. The Fed held an emergency meeting in April 2008 to prevent Bear Stearns from defaulting on $10 trillion in holdings with the understanding it would be bought by JP Morgan. The economy showed some signs of improvement until the full extent of the economic disaster became apparent later in the year.

6. During the financial panic, the Fed loaned some $540 billion to money market funds to stabilize investments.

7. Bernanke introduced the Federal Reserve policy of quantitative easing. This process consisted of the Fed purchasing billions of dollars of mortgage-based securities and long-term Treasury bonds. The idea was meant to stimulate the economy by allowing borrowing for more spending within the private sector.

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8. While holding interest rates down to near-zero levels, Bernanke’s Fed aimed at keeping inflation within a two percent range for economic stability, according to the Federal Reserve website.

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Ben Bernanke, who headed the Federal Reserve from 2006 to 2014, struggled with a national financial crisis and global recession that began with the economic meltdown in 2008.
Federal Reserve, Bernanke, moves
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2015-33-10
Friday, 10 July 2015 11:33 PM
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