Federal Reserve Chairman Ben Bernanke said Thursday that last year's financial crisis could have been "markedly worse" if not for the strong monetary and regulatory actions taken by the Fed, the Treasury, Congress and other authorities to dampen the economic damage caused by the crisis.
Speaking before the Senate Banking Committee at his reconfirmation hearing, Bernanke lauded the Fed for taking such actions as cutting interest rates to near-zero levels, ensuring that financial institutions have access to short-term functions, and implementing targeted lending programs to restart the flow of credit.
"Taken together, the Federal Reserve's actions have contributed substantially to the significant improvement in financial conditions and to what now appear to be the beginnings of a turnaround in both the U.S. and foreign economies," Bernanke said.
Bernanke added, however, that the Fed still must do more to help the economy emerge from its recession and affirmed the Fed's commitment to achieving this goal.
"Far too many Americans are without jobs, and unemployment could remain high for some time even if, as we anticipate, moderate economic growth continues," he said. "The Federal Reserve remains committed to its mission to help restore prosperity and to stimulate job creation while preserving price stability."
The chairman went on to say that the Fed is aware that it must also be able to withdraw its accommodative monetary policy in a "smooth and timely" way to help markets recover, adding that the Fed is confident it has the tools to do so when the time comes.
Bernanke also said that the central bank was working to identify and implement improvements in its regulation of financial firms, including initiatives to improve consumer protection and ensure that banks have stronger liquidity, hold more capital and practice better risk management.
He added that the Fed has also strengthened its transparency in monetary policy decisions and stressed the importance that such decisions be exempt from audits in order to "protect monetary policy from short-term political pressures and thereby to support our ability to effectively pursue our mandated objectives of maximum employment and price stability."
Bernanke's reconfirmation hearing comes as the Fed is facing increasing criticism from lawmakers claiming that the Fed did too little to regulate large financial institutions that collapsed and contributed to the financial crisis that crippled the U.S. economy.
Last month, Congressman Ron Paul, R-Texas, was instrumental in adding a provision to a pending regulatory reform bill that would allow the Government Accountability Office to audit the central bank's monetary policy decisions.
However, Bernanke has received votes of confidence from other lawmakers, as banking committee chairman Christopher Dodd, D-Conn., said during his opening statement that he would vote for the chairman's reappointment.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.