The Fed chief made the comments during the PBS NewsHour’s “Bernanke on the Record,” a forum with local citizens in Kansas City, Mo., moderated by NewsHour anchor Jim Lehrer on Sunday. The special will air on the NewsHour and on local PBS stations this week.
“The problem we have is that in a financial crisis, if you let the big firms collapse in a disorderly way, it will bring down the whole system,” Bernanke said. “I was not going to be the Federal Reserve chairman who presided over the second Great Depression.”
The Fed chief took questions on a range of issues over the course of the town-hall style event, including the toughest moments of the financial crisis in the fall of 2008, missed steps in the subprime mortgage crisis, the impact of the stimulus and TARP programs, and the Fed’s independence in establishing monetary policy.
The Fed chief also predicted that unemployment will continue to rise in the next few months.
In response to a question on consumer protections, Bernanke acknowledged that he believed the Fed was “late in addressing the subprime lending problem.”
On the Fed’s current actions, Bernanke said the Fed is putting the “pedal to the metal” to support the economy and turn the corner toward growth.
Bernanke expressed particular opposition to a proposal in Congress for the Government Accounting Office to be able to “audit” the Fed’s interest rate decisions.
“I don’t think that’s consistent with independence. I don’t think the American people want Congress running monetary policy. That’s exactly what (the bill) would do,” he said.
Bernanke’s participation in the Kansas City forum caps off a series of efforts to communicate to the public, including sitting for an interview on the CBS program “60 Minutes,” writing op-eds to explain the Fed’s actions, and holding a public Fed meeting on credit card regulations.
Before the NewsHour forum, Bernanke told reporters “my goal is to talk to people outside the Beltway to hear what they are thinking, and do the best I can to try to explain what’s happening in the economy,” according to the Wall Street Journal.