Former Fed Chair Says More Bankers Should Have Gone to Jail

Former Federal Reserve Chairman Ben Bernanke has said more folks active in the financial crisis should have challenged appropriate actions, in place of putting the duty around the financial businesses.

For one thing, he says that more corporate executives should have gone to jail for their misdeeds.

But he said a financial firm was a legal fiction, not a person, and that “you can’t put a firm in jail”. “Everything that went wrong or was illegal was done by a few individual, not by an abstract firm… there should have been more accountability at the individual level”.

Bernanke defended his policies, noting the steady decline in the unemployment rate in recent years.

Bernanke, writing an opinion piece in the Wall Street Journal on Monday, said that US economic output is 8.9 percent higher than its previous peak before the recession. “Unfortunately, the potential buyers for Lehman, Bank of America and Barclays, decided against buying the company because it had so much red ink on the balance sheet”.

Bernanke explained that the Fed did not have the authority to jail anyone. He did, however, admit that the Fed had failed to communicate properly with the public and explain its actions.

Coincidentally, Bernanke’s book comes at a very important time for the Fed.

Bernanke left the Fed a little over a year ago, to be succeeded by Janet Yellen.

Bernanke cut the Fed’s key interest rate to zero in December 2008 to spur growth – a level that has been sustained ever since.

Yet still, Bernanke’s comments stand out against the silence from the rest of the nation’s elites, who would prefer this massive misfire of American justice go evaporate into the refined air of a nation now apparently comfortable not only with a tiny minority holding all the wealth, but also newly unaccountable to its laws. The basic idea is that the Fed helped Wall Street bankers get richer while everyone else had to suffer through tough times.

He did not, however, name any individual he thought should have been prosecuted and noted that the Federal Reserve is not a law-enforcement agency. He argues he had to do it to prevent an even worse economic downturn. “I surely was uneager to bail Wall Street out, and that I had no reason to wish to bailout Wall Street itself”, US Today he told. “We knew that if the financial system collapsed, the economy would immediately follow”.