WASHINGTON (CNNMoney.com) - Federal Reserve Chairman Ben Bernanke unveiled a blueprint Wednesday for pulling back the trillions of dollars the central bank has provided to prop up the nation's economy.
"These programs, which imposed no cost on the taxpayer, were a critical part of the government's efforts to stabilize the financial system and restart the flow of credit," Bernanke said in prepared testimony for a Capitol Hill hearing that was postponed due to snow. "As financial conditions have improved, the Federal Reserve has substantially phased out these lending programs."
But Bernanke also emphasized that the U.S. economy still needs the support of easy money policies. He said that "at some point" in the future the Fed will "need to tighten financial conditions" by raising short-term interest rates and reversing programs that pumped liquidity into the markets.
Washington (CNN) - The Senate will vote Thursday on whether to give Ben Bernanke a second term as Federal Reserve chairman, according to Senate Majority Leader Harry Reid's spokesman.
Jim Manley, the spokesman for Reid, said Tuesday that Senate leaders reached agreement on holding the Bernanke vote on Thursday morning in addition to a vote on raising the federal debt ceiling.
Democratic leaders and White House officials say they expect to muster the 60 votes necessary to overcome opposition to confirming Bernanke for a second term.
Asked about Federal Reserve Chairman Ben Bernanke who has been nominated by President Obama for a second term heading the nation’s central bank, Shelby said, “I believe if you look at his record objectively, you shouldn’t vote for him.”
“I believe the Federal Reserve is part and parcel of the whole problem [that led to the recent financial crisis], that helped create the problem – loose money and too little regulation Now they want to ride to the rescue with the taxpayers’ money. I believe that is not a good record by the Fed, led by Ben Bernanke. I intend to vote against him.”
Asked whether not confirming Bernanke could spook already shaky financial markets, Shelby brushed aside the suggestion that protecting the markets is a reason to back Bernanke.
Washington (CNN) – As the White House tries to rally wavering support for the re-confirmation of Federal Reserve chief Ben Bernanke, two senators – one Democrat and one Republican – announced Sunday that they will support the nation’s top banker despite reservations about him.
President Obama has nominated Bernanke for a second term as the head of the nation’s central bank but Bernanke’s confirmation has become ensnared in concerns about his role in the financial crisis that began in late 2008 and nearly pushed the economy into freefall. Bernanke’s nomination has also been tripped up in recent days by growing populist accusations that the Obama administration bailed out Wall Street and the automotive industry while doing too little to create jobs as the official unemployment rate remains stubbornly at 10 percent.
New Jersey Democrat Sen. Robert Menendez said Sunday on CNN’s State of the Union that he’s had concerns about Bernanke regarding “consumer protection, of being ahead of the curve on the economy and particularly on mortgage foreclosures.”
“I think [Bernanke’s] learned from those lessons,” Menedez told also told CNN Chief National Correspondent John King. “I give him credit for making some significant moves to – along with President Obama – from stopping us from going into a deep depression. So, yes, I will support Chairman Bernanke and I believe that his confirmation will be assured.”
Utah Republican Sen. Orrin Hatch also told King that he will support Bernanke, though Hatch’s pledge of support was far from a ringing endorsement of the embattled Fed chief.
"We need his leadership, and the president is very confident that the chairman will be confirmed," David Axelrod said on CNN's "State of the Union."
Axelrod praised Bernanke's "very strong and steady leadership" during the economic crisis that began in 2008, saying without it, the nation's economy may have "slipped into the abyss."
However, some members of the Senate Democratic caucus, led by independent Bernie Sanders of Vermont, said last week they would oppose Bernanke's confirmation for a second term.
NEW YORK (CNNMoney.com) - Former Federal Reserve Chairman Paul Volcker said Thursday that more needs to be done to regulate the financial system before the lessons of the recent crisis are forgotten.
"We must not shrink away from change but accept the need for basic financial reform," said Volcker, currently chairman of President Obama's Economic Advisory Board, in remarks to the Economic Club of New York.
He said the economy appears to be growing slowly, and that the financial crisis is beginning to seem to some like a "bad dream."
But the magnitude of the crisis showed that the underlying problems are "more fundamental" and require "broad reform" of the financial system, he warned.
New York (CNNMoney.com) - Federal Reserve chairman Ben Bernanke said Monday he's confident the Federal Reserve will make money on the trillions ithas pumped into the economy since the start of 2008.
"I think we're in very good shape," Bernanke said, answering questions following a speech at the Economic Club of Washington. "I do believe we're going to get back all the money, and indeed we'll be showing for the taxpayers fairly significant extra income."
Bernanke was referring specifically to Fed programs - not the Troubled Asset Relief Program (TARP). The U.S. Treasury will likely lose money on TARP, though the Obama administration is expected to announce soon that losses will be $200 billion less than initially expected.
The Fed has actually pumped far more money into the economy than Treasury did through TARP.
NEW YORK (CNNMoney.com) - Federal Reserve Chairman Ben Bernanke got an endorsement from Senate Banking Committee Chairman Chris Dodd at the start of his confirmation hearing Thursday, even as Dodd called for a removal of some of the central banks current powers.
Dodd said Bernanke and the Fed deserved credit for the steps taken in the financial crisis of a year earlier to stop the economic crisis from becoming significantly worse than it did.
"I believe you are the right leader for this moment in the nation's economic history and it would send the right message to markets," Dodd said during his opening statement.
But the committee's ranking Republican, Sen. Richard Shelby of Alabama, was far more critical of Bernanke in his opening statement, telling Bernanke "I fear now our trust and confidence (in the Federal Reserve) was misplaced." He did not say whether he would vote for or against confirmation, though.
NEW YORK (CNNMoney.com) - On the eve of what's expected to be a tough confirmation hearing Thursday, one senator has thrown a political roadblock intended to stymie Fed Chairman Ben Bernanke's second term.
Bernie Sanders, I-Vt., issued a statement late Wednesday saying he will prevent Bernanke's nomination by placing a hold, an informal practice by which a senator informs the majority leader that he does not wish a particular measure to reach the floor for a vote.
"The American people overwhelmingly voted last year for a change in our national priorities to put the interest of ordinary people ahead of the greed of Wall Street and the wealthy few," said Sanders, one of Bernanke's sharpest critics, in a statement. "What American people did not bargain for was another four years for one of the key architects of the Bush economy."
Sanders said Bernanke, who took the helm of the Fed in 2006, could have averted the financial crisis in several ways, but failed at "core responsibility of the Federal Reserve" and thus "it's time for him to go."
Among the litany of reasons he cited for his move, the statement from Sanders' office noted that unemployment had more than doubled under Bernanke's watch and more than 120 banks have failed since he became chairman.
Bernanke's first term expires next month.
Majority leader Sen. Harry Reid, D-Nev., would not need to recognize Sanders' hold, but Sanders could filibuster the motion to nominate the Fed chairman for another 4-year term.
A spokesman for Senator Reid would not comment on the hold by Sanders.
Washington (CNN) - The Federal Reserve is stepping up its effort to protect consumers' credit. The latest move? Today it proposed new rules for limiting fees and extending the expiration date for many gift cards. Under the new rules a gift card could not expire in less than five years. And the issuer couldn't charge more than one fee a month if you don't use the card – and that would apply only if you hadn't used the gift card for a year. "The rules would protect consumers from certain unexpected costs and would require that gift card terms and conditions be clearly stated," the Federal Reserve said in a statement announcing the move.
Don't get too excited – this rule wouldn't go into effect until the middle of next year, and companies have 30 days to submit their comments and try to alter the rule. Bottom line: it won't apply to this year's holiday purchases.
This latest announcement comes as the Fed squares off with senators considering legislation that would effectively strip the Fed of its consumer protection role. Instead, the new legislation would hand that power to a new Consumer Financial Protection Agency whose mission would be overseeing credit cards, mortgages and other financial products marketed to the public. Last week, the Fed proposed restricting overdraft fees on ATM cards - part of an apparent public relations effort to demonstrate its commitment to beefing up its role as a defender of the consumer against bank abuses.