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The Federal Reserve and the Financial Crisis

The Federal Reserve and the Financial Crisis

LECTURES BY Ben S. Bernanke
Copyright Date: 2013
Pages: 144
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  • Book Info
    The Federal Reserve and the Financial Crisis
    Book Description:

    In 2012, Ben Bernanke, chairman of the U.S. Federal Reserve, gave a series of lectures about the Federal Reserve and the 2008 financial crisis, as part of a course at George Washington University on the role of the Federal Reserve in the economy. In this unusual event, Bernanke revealed important background and insights into the central bank's crucial actions during the worst financial crisis since the Great Depression. Taken directly from these historic talks,The Federal Reserve and the Financial Crisisoffers insight into the guiding principles behind the Fed's activities and the lessons to be learned from its handling of recent economic challenges.

    Bernanke traces the origins of the Federal Reserve, from its inception in 1914 through the Second World War, and he looks at the Fed post-1945, when it began operating independently from other governmental departments such as the Treasury. During this time the Fed grappled with episodes of high inflation, finally tamed by then-chairman Paul Volcker. Bernanke also explores the period under his predecessor, Alan Greenspan, known as the Great Moderation. Bernanke then delves into the Fed's reaction to the recent financial crisis, focusing on the central bank's role as the lender of last resort and discussing efforts that injected liquidity into the banking system. Bernanke points out that monetary policies alone cannot revive the economy, and he describes ongoing structural and regulatory problems that need to be addressed.

    Providing first-hand knowledge of how problems in the financial system were handled,The Federal Reserve and the Financial Crisiswill long be studied by those interested in this critical moment in history.

    eISBN: 978-1-4008-4716-7
    Subjects: Economics, Political Science, Finance, Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Publisher’s Note
    (pp. vii-x)
  4. LECTURE 1 Origins and Mission of the Federal Reserve
    (pp. 1-28)

    What I want to talk about in these four lectures is the Federal Reserve and the financial crisis. My thinking about this is conditioned by my experience as an economic historian. When one talks about the issues that occurred over the past few years, I think it makes the most sense to consider them in the broader context of central banking as it has been practiced over the centuries. So, even though I am going to focus in these lectures quite a bit on the financial crisis and how the Fed responded, I need to go back and look at...

  5. LECTURE 2 The Federal Reserve after World War II
    (pp. 29-63)

    It is very helpful to put the recent crisis and the ongoing recovery into historical context. As we go along, I want to make sure you keep your eyes on the ball, that is, the two basic missions of a central bank. The first is maintaining macroeconomic stability: maintaining stable growth and keeping inflation low and stable. The principal policy tool for maintaining macroeconomic stability is monetary policy. In normal times, the Fed and other central banks use open market operations—purchases and sales of securities in markets—to move interest rates up or down, and in doing so try...

  6. LECTURE 3 The Federal Reserve’s Response to the Financial Crisis
    (pp. 64-96)

    Today I want to talk about the Federal Reserve’s response to the financial crisis. In the last couple of lectures I mentioned a key theme, the two main responsibilities of central banks—financial stability and economic stability. Let me turn it around and talk about the two main tools. For financial stability, the main tool the central banks have is lender of last resort powers by providing short-term liquidity to financial institutions, replacing lost funding. Central banks, as they have for a number of centuries, can help calm a financial panic. For economic stability, the principal tool is monetary policy;...

  7. LECTURE 4 The Aftermath of the Crisis
    (pp. 97-130)

    Today I want to talk about the aftermath of the crisis. To recap, I talked last time about the most intense phase of the crisis, in late 2008 and early 2009: financial panic both in United States and in other industrialized countries; the threat to the stability of the entire global financial system; the Federal Reserve in its lender of last resort role, working with others, provided short-term liquidity to help stabilize key institutions and markets.

    One of the conclusions we can now draw, having looked at the history, is that rather than being some ad hoc and unprecedented set...

  8. Index
    (pp. 131-134)