Wall St. ex­ecs should be jailed for cri­sis: Ber­nanke

The China Post - - WORLD BUSINESS -

For­mer U.S. Fed­eral Re­serve Chair­man Ben Ber­nanke says some Wall Street ex­ec­u­tives should have gone to jail for their roles in the fi­nan­cial cri­sis that gripped the coun­try in 2008 and trig­gered the Great Re­ces­sion.

Bil­lions of dol­lars in fines have been levied against ma­jor banks and bro­ker­age firms in the wake of the eco­nomic melt­down that was in large part trig­gered by reck­less lend­ing and shady se­cu­ri­ties deal­ings that blew up a hous­ing bub­ble.

But in an in­ter­view with USA To­day pub­lished Sun­day, Ber­nanke said he thinks that in ad­di­tion to the cor­po­ra­tions, in­di­vid­u­als should have been held more ac­count­able.

“It would have been my pref­er­ence to have more in­ves­ti­ga­tions of in­di­vid­ual ac­tions be­cause ob­vi­ously ev­ery­thing that went wrong or was illegal was done by some in­di­vid­ual, not by an ab­stract firm,” Ber­nanke said.

Asked if some­one should have gone to jail, the for­mer Fed chair­man replied, “Yeah, I think so.” He did not, how­ever, name any in­di­vid­ual he thought should have been pros­e­cuted and noted that the Fed­eral Re­serve is not a lawen­force­ment agency.

Ber­nanke is pro­mot­ing his new 600-page memoir, “The Courage to Act: A Memoir of a Cri­sis and Its Af­ter­math,” which is sched­uled to be pub­lished Mon­day.

He be­gan the book af­ter leav­ing the Fed in 2014. The memoir de­tails his take on the cri­sis in which the gov­ern­ment took over mort­gage giants Fan­nie Mae and Fred­die Mac and pro­vided hun­dreds of bil­lions in aid to the big­gest U.S. fi­nan­cial in­sti­tu­tions.

The As­so­ci­ated Press ob­tained an early copy of the book last week. He writes that the tax­payer-pro­vided bailouts of banks and Wall Street firms were hugely un­pop­u­lar, but says they were nec­es­sary to avoid an eco­nomic catas­tro­phe.

“I cer­tainly was not ea­ger to bail out Wall Street and I had no rea­son to want to bailout Wall Street it­self,” he told USA To­day. “But we did it be­cause we knew that if the fi­nan­cial sys­tem col­lapsed, the econ­omy would im­me­di­ately fol­low.”

AP

In this Jan. 16, 2014 file photo, then-Fed­eral Re­serve Chair­man Ben Ber­nanke speaks at the Brook­ings In­sti­tu­tion in Washington.

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