Nov 4, 2007

Bernanke on moral hazard

It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions," Bernanke said. But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy.

~ Ben S. Bernanke, Federal Reserve chairman, speech given at the Federal Reserve Bank of Kansas City's Economic Symposium, Jackson Hole, Wyoming, August 31, 2007

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