Ben Bernanke

  • 1996-2002 - Princeton - Professor / Chair 
  • 2002-2005 - Member - Board of Governors of the Federal Reserve System 
  • 2006-2014 - Chair - Federal Reserve (14th) 
  • (p19) - Ben BERNANKE. I think if there is a single episode in this entire 18 months that has made me more angry, I cannot think of one than AIG.   AIG exploited a huge gap in the regulatory system.
    • There was no oversight of the Financial Products Division.
    • This was a hedge fund, basically, that was attached a large and stable insurance company, made huge numbers of irresponsible debts, took huge losses.

2009 0303 - GOV (Senate) - Economic and Budget Challenges for the Short and Long Term, Ron Wyden (D-OR) - [PDF-54p, VIDEO-Senate Page]

  • governmentattic.org/13docs/FedReserveResponseComgCmtees_2012-2013.pdf
    • 2010 0119 - Letter - Ben Bernanke to Barney Frank (D-MA) and Spencer Bachus (R-AL) - p3-26
      • Enclosed are responses to the questions that you submitted by letter dated December 11, 2009. AU or part of several of the questions request documents. Responsive documents are being made available to your staffs.
        • p11 - 11. What proportion of assistance provided by the Federal Reserve to AIG was used to address problems with AIG's securities lending program and what proportion was used to address problems with AIG's Financial Products division? Please provide a detailed description of how the funds were used in each case.
        • p15 - 12. Please describe the Federal Reserve's consultations with state insurance commissioners in determining whether and how financial assistance to address problems with AIG's securities lending program should be provided. [Provide copies of all relevant emails, correspondence, and other communications in addition to those provided in response to question 8.]
        • p15 - 13. Other than the problems associated with AI G's securities lending program, were there any other problems involving AIG's insurance companies that contributed to the company's overall financial problems?
        • p15 - 14. Was concern about the failure of any of AIG's insurance companies a material factor in the Federal Reserve's decisions either initially or subsequently to provide financial support to AIG? If not, why did the Federal Reserve allow the proceeds of its loan to AIG to be used to recapitalize insurance companies? If so, please explain how the Federal Reserve decided that insurance companies presented sufficient risks to the financial system to justify receiving financial assistance?
    • 2010 0127 - Letter - Ben Bernanke to Darrell Issa (R-CA) - p27-31
      • This is in response to your letter of January 22, 2010, asking questions about the role of the Federal Reserve in the transactions involving the American International Group, Inc. (AIG), the Federal Reserve, and certain counterparties of credit default swaps written by AlG on multi-sector collateralized debt obligations (CDOs).
    • 2010 0326 - Letter - Ben Bernanke to Edolphus Towns (D-NY) - p32-38
      • Thank you for your letter of March 18, 2010, regarding Stephen Friedman's service on the board of the Federal Reserve Bank of New York.
      • This responds to questions posed by Chairman Edolphus Towns and Member Stephen Lynch regarding Stephen Friedman's service on the board of directors of the Federal Reserve Bank of New York.
    • 2010 0409 - Letter - Ben Bernanke to Charles E. Grassley (R-IA) - p39-40
      • I am responding to your letter of March 25 regarding the Federal Reserve's exit strategy and related issues.
    • 2010 0416 - Letter - Ben Bernanke to Barney Frank (D-MA) - p41
      • This is in response to your letter of March 3, 2010, requesting that the Federal Reserve investigate certain allegations that inappropriate political interference may have been applied to the Federal Reserve System resulting in hidden transfers of resources to facilitate crimes during the Watergate scandal in the 1970s and to Iraq for weapons purchases during the 1980s.
    • 2010 0710 - Letter - Elizabeth Duke  to Barney Frank (D-MA) - p42-44
      • Enclosed are my responses to the written questions you submitted following the February 26, 2010, hearing before the Committee on Financial Services.
    • 2010 0810 - Letter - Ben Bernanke to Barney Frank (D-MA) - p45
      • Thank you for your letter of July 30, 2010, recommending <Mr.  Redacted> for a position on our Consumer Advisory Council.
    • 2011 0128 - Letter - Ben Bernanke to Darrell Issa (R-CA) - p46-47
      • This is in response to your letter dated January 11, 2011, requesting information related to the Federal Reserve's financial assistance to the American International Group, Inc. ("AIG") and certain information relating to the assets of Maiden Lane LLC, a special purpose vehicle formed by the Federal Reserve Bank of New York ("FRBNY") to facilitate the acquisition of Bear Stearns, Inc. by JPMorgan Chase. As I indicated to you in our meeting last month, the Federal Reserve wants to cooperate with the Committee's oversight efforts and to provide the Committee with access to the information requested.
    • ........
    • 2009 0112 - Letter - Elizabeth Duke to Chris Dodd (D-CT) - p527-
      • I am pleased to enclose my responses to your additional questions received following the October 23, 2008, hearing before the Committee on the turmoil in U.S. credit markets. Also enclosed for the record are copies of my responses to the questions submitted by Senators Menendez and Enzi, which have been forwarded directly to their offices.
      • Q.6. While financial problems in AIG Financial Products have been detailed by the Federal Reserve and the press, specifically regarding credit default swaps, Board staff has indicated that the life insurance company held by AIG may also have financial problems. Please detail these financial problems. Please indicate whether any of the loans, and if so, what amount, has been spent in the life insurance, and other insurance companies.
  • (p13) - Ben Bernanke: Conceivably, its failure could have resulted in a 1930’s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs.

2009 0324 - GOV (House-CFS) - Oversight of the Federal Government's Intervention at American International Group - [PDF-91p,  VIDEO-CSPAN]

  • Chairman Bernanke on Financial Regulatory Overhaul - [VIDEO-CSPAN]
    • The recent financial crisis clearly demonstrated that risks to the financial system can arise not only from banks, but also from other financial firms -- such as investment banks or insurance companies -- that traditionally have not been subject to the type of regulation and consolidated supervision applied to bank holding companies.
  • “A.I.G. exploited a huge gap in the regulatory system,” Mr. Bernanke said.
    • “There was no oversight of the financial products division.
    • This was a hedge fund, basically, that was attached to a large and stable insurance company.”
  • And this quasi-hedge fund, Mr. Bernanke went on, to nobody’s surprise, made irresponsible bets and took huge losses.

2009 0303 - NYT - Fed Chief Says Insurance Giant Acted Irresponsibly - [link]

2009 0303 - GOV (Senate) - Economic and Budget Challenges for the Short and Long Term, Ron Wyden (D-OR) - [PDF-54p, VIDEO-Senate Page]

  • (p4-5) - 1Regulatory Restructuring: Hearing Before the H. Comm. on Financial Services, 111th Cong. (2009) (statement of Ben Bernanke, Chairman, Board of Governors, Federal Reserve)
    • (“The current financial crisis has clearly demonstrated that risks to the financial system can arise not only in the banking sector, but also from the activities of other financial firms—such as investment banks or insurance organizations—that traditionally have not been subject, either by law or in practice, to the type of regulation and consolidated supervision applicable to bank holding companies. While effective consolidated supervision of potentially systemic firms is not, by itself, sufficient to foster financial stability, it certainly is a necessary condition.”), 

MetLife v. FSOC – Document 22 – Notice of Filing – 15-cv-45 – Filed 05/11/15 – 75p

  • 2015 - Book - The Courage to Act: A Memoir of a Crisis and Its Aftermath, by Ben S. Bernanke
    • — Recounting the frenzied deliberations as the Fed grappled with the collapse of giant insurer American International Group, Bernanke says, "I kept my emotions in check and tried to view the situation analytically, as a problem to be solved.
      • But once I fully understood how irresponsible (or clueless) AIG's executives had been, I seethed."
      • AIG eventually received nearly $185 billion in federal aid.

cbsnews.com/texas/news/bernanke-recalls-lehmans-surreal-failure/

  • 1991 - AP - The Gold Standard, Deflation, and Financial Crisis in the Great Depression, by Ben Bemanke - 37p
  • 1995 - AP - Inside the Black Box: The Credit Channel of Monetary Policy Transmission, by Ben Bemanke - 102p
  • 2015 - Book - The Courage to Act: A Memoir of a Crisis and Its Aftermath, by Ben S. Bernanke
    • Brookings - frequently used sources for The Courage to Act, with links; see also A Note on Sources and Selected Bibliography in the printed book - 56p
  • Chairman Bernanke's College Lecture Series: The Federal Reserve and the Financial Crisis
  • 2008 0227 - GOV (House) - Monetary Policy and the State of the Economy, Part II,  (CSPAN) US Economic Outlook
  • 2008 0402 - GOV (JEC) - U.S. Economic Outlook
    • Ben Bernanke
    • 1:44:00 - Kennedy - Toys and Drugs, Financial Product Regulation
    • [PDF-69p, VIDEO-CSPAN] - <mp3, mp4>
    • JEC - Joint Economic Committee
  • 2008 0710 - GOV (House) - Systemic Risk and the Financial Markets, CSPAN - Transformation of Financial Markets
    • [PDF-86p, VIDEO-CSPAN] - <mp3, mp4>
    • Paulson, Bernanke
    • 1:17:30 - Paulson - need resolutions authority like FDIC
  • 2009 0224 - GOV (Senate) - Federal Reserve's First Monetary Policy Report for 2009
    • Senate - Banking, Housing, and Urban Affairs: Oversight on the Monetary Policy Report to Congress Pursuant to the Full Employment and Balanced Growth Act of 1978
    • (p78) - Q.4. In a statement Monday, AIG said it is continuing to work with the government to evaluate potential new alternatives for addressing AIG's financial challenges. AIG's rescue package has already been increased twice since September, from $85 billion to nearly $123 billion in October and then to $150 billion in November. According to today's WSJ, AIG is seeking an overhaul of its $150 billion government bailout package that would substantially reduce the insurer's financial burden, while further exposing U.S. taxpayers to its fortunes. Are you and Treasury considering changing our approach to AIG from that of a creditor to one of a potential owner?
    • (p78) - Response to Written Questions of Senator Bennett from Ben S. Bernanke
      • (p85) - A.4. As explained in the reports submitted to Congress under section 129 of the Emergency Economic Stabilization Act of 2008, the Federal Reserve, in conjunction with the Treasury Department, has taken a series of steps since September 2008, to address the liquidity and capital needs of the American International Group, Inc. (AIG) and thereby to help stabilize the company, prevent a disorderly failure, and protect financial stability, which is a prerequisite to resumption of economic activity. In particular, in September and November 2008, the Federal Reserve established several credit facilities, including a Revolving Credit Facility, to further these objectives. As part of the November restructuring, the Treasury purchased $40 billion in AIG preferred stock. In light of the significant challenges faced by AIG in the last months of 2008 and the continued risk it poses to the financial system, on March 2, 2009, the Federal Reserve and the Treasury announced a restructuring of the government's assistance to the company. The March actions announced by the Federal Reserve include partial repayment of the Revolving Credit Facility with preferred stock interests in two of AIG's life insurance subsidiaries and with the proceeds of new loans that would be secured by net cash flows from designated blocks of existing life insurance policies held by other life insurance subsidiaries of AIG. These actions were undertaken in the context of the Federal Reserve's role as a creditor of AIG. As part of the March restructuring, the Treasury established a capital facility that allows AIG to draw down up to approximately $30 billion as needed over time in exchange for additional preferred stock. For more detail, please see Federal Reserve System Monthly Report on Credit and Liquidity Programs and The Balance Sheet (June 2009) at 13-16, http://www.federalreserve.gov/monetarypolicy/files I monthlyclbsreport200906.pdf
  • 2009 0303 - GOV (Senate) - Economic and Budget Challenges for the Short and Long Term, Ron Wyden (D-OR) - [PDF-54p, VIDEO-Senate Page]
  • 2009 0324 - GOV (House) - Oversight of the Federal Government's Intervention at American International Group
    • [PDF-91p,  VIDEO-CSPAN] - <mp3, mp4>
    • Geithner (DOTT), Bernanke (FRB), William Dudley (FRB-NY) 
    • (p13) - Bernanke - Conceivably, its failure could have resulted in a 1930’s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs.
    • House - Committee on Financial Services