Bernanke: Nothing I Could Do to Save Lehman
The Wall Street Journal reports on Ben Bernanke's testimony before the Financial Crisis Inquiry Commission.
Federal Reserve Chairman Ben Bernanke told a panel examining the U.S. financial crisis that he had no options to prevent Lehman Brothers' failure in September 2008 even though he knew its downfall would be "catastrophic" to the financial system and economy.
The Lehman failure set off severe market turmoil, spurring continuing debate about whether the government should've done more at the time to halt the investment bank's collapse. Speaking to the Financial Crisis Inquiry Commission on Thursday, Mr. Bernanke said legal and practical considerations prevented taking action, even though "I never at any time wavered in my view that we should do absolutely everything possible to prevent the failure of Lehman."
The Democratic chairman of the 10-member panel, Phil Angelides, pressed Mr. Bernanke on the move, again calling it a "conscious policy decision," as he did during the commission's hearing on Wednesday, citing comments from other government officials.
The Fed chairman agreed that that his own statements in the days after the firm's downfall–when he told lawmakers that the Fed and Treasury declined to commit public funds after they "judged" that investors and trading partners had time to take precautionary measures–had supported the public perception that the government had options.
Click here to read more.
