Someone bearing a striking resemblance to Ben Bernanke recently stated that “too big to fail” (TBTF) banks were a cause of the Great Recession and needed to be fixed. He remarked, “I agree with Elizabeth Warren 100 percent that it’s a real problem. ‘Too big to fail’ is not solved and gone.”
Could this have been the Chairman of the Federal Reserve Board, Ben Bernanke, who is often accused of coddling the nation’s largest banks? Surely not.
Bernanke has stood, nearly alone at times, in favor of policies to help TBTF banks through difficult economic times.
On the right, conservatives and adherents of Austrian economics have blasted Bernanke for giving away billions to the largest members of the Federal Reserve.
On the left, professors like Alan Blinder and Simon Johnson have denounced Bernanke for his regulatory lenience with TBTF institutions.
Yet, less than two weeks ago, it was indeed the Chairman of the Federal Reserve Board who said, “Too big to fail was a major source of the crisis…and we will not have successfully responded to the crisis if we do not address that successfully.”
What could have inspired this departure by Bernanke?
There has been considerable speculation that he is planning to leave the Federal Reserve Board after his current term ends in 2014. His support for ending TBTF has increased this speculation.