Friday, April 3, 2009
Ben Bernanke says the Federal Reserve was "extremely uncomfortable" about last year's bailouts of big financial companies, but the Fed chief believes the central bank's strategy to ease the financial crisis is working.
Bernanke referred to the Fed's unprecedented decisions last year to step in and financially back JPMorgan Chase's takeover of then-troubled investment house Bear Stearns, and throw its first of four financial lifelines to insurance giant American International Group.
In remarks to a Fed conference in North Carolina, he says the Fed was forced to take action because the collapse of those companies would have dealt a serious blow to the financial system and the broader economy. The situation underscores the need for new powers to allow the government to safely wind down such huge firms.