On Air Now

Upcoming Shows

Program Schedule »

Listen

Listen Live Now » 1450 AM Holland, MI

Weather

Current Conditions(Holland,MI 49422)

More Weather »
49° Feels Like: 44°
Wind: NE 12 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

Partly Cloudy 51°

Tonight

Cloudy 41°

Tomorrow

Cloudy 62°

Alerts

Fed's Bernanke scores 8/10 from economists on his way out

Participants applaud U.S. Federal Reserve Chairman Ben Bernanke at the end of a town hall event for teachers at the Federal Reserve board's
Participants applaud U.S. Federal Reserve Chairman Ben Bernanke at the end of a town hall event for teachers at the Federal Reserve board's

By Ross Finley

LONDON (Reuters) - Federal Reserve Chairman Ben Bernanke, who has steered the U.S. economy through the worst financial crisis and recession in many generations, has received a glowing review from economists for his overall performance two months before he steps down.

Architect of some of the most aggressive monetary policies ever conducted by a central bank, Bernanke scored 8 out of 10, countering the criticism he has faced for failing to spot trouble brewing in advance.

"Bernanke's performance during and after the crisis has been just about right at every turn," said Bill Cheney, chief economist at Manulife Asset Management, who was one of the more generous of the 53 economists who gave Bernanke a grade.

"The reason for not awarding a 10 is his failure to take more precautionary steps beforehand, for example, mortgage lending regulations," he said.

While not every respondent rated him so highly, only two, both based in Europe, gave Bernanke a rating of less than 5.

While the U.S. economy emerged from recession years ago, stock markets have rocketed to record highs without taking the rate of economic growth or significant numbers from the ranks of millions of unemployed Americans along with them.

The U.S. housing market is finally on the mend but companies have hoarded huge piles of cash and are still not investing in the future, leaving households borrowing at near-zero interest rates to pick up the economic slack.

The Fed's quantitative easing has also ricocheted around the world, first pumping hot money into emerging markets and then causing ructions as its withdrawal was threatened.

AMONGST FRIENDS

Central bankers tend not to get low marks from the people who track and forecast their every move.

The institutions that many economic forecasters work for often have the most to gain from easy money policies, which have oiled financial markets.

One respondent to an October 2005 Reuters poll described Alan Greenspan, Bernanke's predecessor, as having "demi-god status". Greenspan is now routinely cited as shouldering a large part of the blame for the financial crisis.

When Jean-Claude Trichet stepped down as president of the European Central Bank in October 2011, economists gave him 7 out of 10 for his leadership during the financial crisis.

But the last two interest rate hikes Trichet presided over toward the end of his term are now viewed by most investors and forecasters as misguided.

Former Bank of England Governor Sir Mervyn King, respected for his intellectual rigor and his warnings, albeit belated, of the moral hazard of providing untrammeled support to banks, scored a 7 out of 10 in the final days he held office.

Not everyone had words of praise for Bernanke, who oversaw major changes at the Fed, once a fortress-like organization that never even announced policy changes, including introducing regular news conferences.

Joel Naroff of Naroff Economic Advisors called Bernanke "a great crisis manager who didn't see it coming."

"For that reason (he) bears some responsibility for the housing and financial market collapse."

(Writing by Ross Finley; Additional reporting by Andy Bruce; Polling by Ashrith Rao Doddi and Swati Chaturvedi in Bangalore; Editing by Toby Chopra)

Comments