NEW YORK (CNNMoney.com) – Federal Reserve chairman Ben Bernanke said Tuesday that economic recovery hinges on stabilizing the financial system, and proposed new policies aimed at absorbing financial shocks in the future.
Watch: Bank reform 'key to recovery,' says Bernanke
"Until we stabilize the financial system, a sustainable economic recovery will remain out of reach," Bernanke said in prepared remarks.
Bernanke said governments around the world must work together to address problems associated with financial institutions deemed too big to fail. These large, interconnected financial institutions that pose a "systemic risk" to economic stability, he said.
Then reform the banks and get on with it.
Bernanke is correct, the banks must be reregulated before recovery can begin in earnest. Geithner has been lagging thus far on laying out the details of his plans. America must have a stable banking system to provide confidence in the economy.
And these are the same banks that charge us outrageous card interest rates while paying out mere pennies on interest to savings accounts. That also hit us with excessive ATM fees, overdraft charges, transaction fees, fees to talk to a live teller ect... And we are suppose to bail them out? Let them fail!
Does the Federal Reserve need to be re formed? Taken over by the government?
Regarding credit card "plastic" debt, if the financial institutions keep raising interest rates/fees like they have been recently, they are really going to lose big in this part of their industry.
What sense does it make if someone who makes a payment ONE DAY late has the interest on their entire credit balance raised permanently to outrageous rates into the 30% range?
This would discourage me from even making one more payment on that card. The debtor will never get that card paid off at that rate.
The banks haven't figured this out yet. They will when zillions of people stop making credit card payments.
Why bother? Use your money for the bare necessities. Yes, your credit will go down the tube, but you can resurrect it down the line.
Shocker that the guy who runs a bank cartel wants the banks to be given money. This is not surprising.
Is there someone independent of conflict of interest that has a recommendation on this?
Capitalism........free market system.............
These are not religions.
If they don't work, and there have been plenty of examples throughout our country's history with devastating results, then why do we keep on keepin' on?
There are other examples of financial systems around the world....let's investigate them to see if they will work better.
The Federal Reserve is the biggest risk and filled with crooks.Not many people even know it is a private bank run by unknown money mongers.
I think both democrats and republicans (and their pundit lackeys) are overstating this crisis to advance their agendas and, in the process, causing the market and consumers to panic.
The facts are that:
A) not everyone deserves a loan
B) your house isn't worth the inflated price you paid
C) no one that handles large sums of money should go unregulated
D) the vast majority of us have spent beyond our means and, now that we have stopped, the economy needs to adjust to reality.
E) we don't need 1000 credit card companies, 500 banks, and a starbucks and mcdonalds in every corner.
Once the economy adjusts to a new more common-sensical lifestyle, we will all be fine, just fine.
Benanke is wrong–it's the economy that makes the banks strong, we need to do what the Chinese are doing–declare war on unemployment. Until people feel secure in their jobs they are not going to spend, they won't take out loans, buy houses or cars.Without that– the only capital these banks will recieve is the money pumped into it by the government, taken from those still employed. Those 12.5 million and growing unemployment number, means less people putting money in the governments pocket. What ignorance is a foot.
I read an interesting article in the NYTimes this morning, by conservative, David Brooks, I quote:
" ..... but let's face it the current Republican response is totally misguided. The House Minority leader, John Boehner, has called for a federal spending freeze for the rest of this year. In other words after a decade of profligacy, the Republicans have decided to demand fiscal straightjacket at the one moment in the past 70 years when IT IS COMPLETELY INAPPROPRIATE."
Mr. Brooks is right! Its insane of the GOP! First they controlled BOTH House & Senate from 1994-2007 and spent and DE-regulated all they could! And then, through EIGHT YEARS of Bush they allowed Bush to DOUBLE the National debt and .......... HIDE the TRUE cost of the war!
WHERE WERE ALL THESE SO-CALLED-FISCAL-CONSERVATIVES WHEN BUSH WAS SPENDING OUR NATION IN TO .......... OBLIVION?????????????????????????????????
For all of you who say "this isn't Obama's Problem"...
YES, IT IS.
If, as a private citizen, you take a job that the person who had it before you failed miserably on... guess what? It's your problem now.
If Obama didn't want the job, he shouldn't have run. If he doesn't want it now, he should resign.
Good thing that we have smarter people trying to fix things than those who post on blogs (self included). some things I find interesting and baseless:
1. Abolish the Federal reserve rants........Well now the Fed under geenspan did some damage with it's policies and I think there was some political motivation on that point. But, to rail on Ben Bernake? Who better for the job than a student of the last great deleveraging event in the US? Deny all you want but the Fed has actually served it's purpose well lately, the lengths they have gone in this "event" are incredible and history will bear that out.
2. Rants on Tim Geitner... Who better? I think that most people have a problem with him because they do not understand what he is talking about. Look kids this is no simple matter and there is probably no way to actually explain in real person terms what is going on in the banks.
3. This beleif that the free market will fix it's self is delusional at best. The market was supposed to, by consideration of it's best interest, regulated it's self to prevent such a thing. Did not happen, never will happen the history of 1880's & 1920's and current are but 3 examples of the falicy of the financial industries ability to self regulate.
Mari–check your facts about who was in control of Congress and when.I think you will be surprised to find that Democrats were responsible for the votes to go to war in Iraq, and the votes for the spending during Bush's administration.
...and bank reform depends on transparent use of taxpayer's funds. Considering that the banks have already shown their irresponsible behavior with the "recovery" money that was handed to them, we can pretty much surmise we're in trouble.