Dear Commons Community,
Former Federal Reserve Chairman Ben Bernanke said in a newspaper interview published yesterday that more corporate executives should have been prosecuted for their actions leading up to the 2008 financial crisis. As reported by Reuters:
“Bernanke told USA Today that the U.S. Justice Department and other law enforcement agencies focused on investigating or indicting financial firms.
“But it would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm,” Bernanke was quoted as saying.
Bernanke, who presided over the U.S. central bank during the financial crisis considered the worst since the Great Depression, said it was not up to him to decide whether to prosecute individuals, noting: “The Fed is not a law-enforcement agency.”
“The Department of Justice and others are responsible for that, and a lot of their efforts have been to indict or threaten to indict financial firms,” Bernanke added. “Now a financial firm is of course a legal fiction; it’s not a person. You can’t put a financial firm in jail.”
Bernanke, who retired from the Fed last year after eight years as chairman, said of the financial crisis: “I think there was a reasonably good chance that, barring stabilization of the financial system, that we could have gone into a 1930s-style depression.”
In the interview, Bernanke, whose memoir is being published this week, acknowledged that analysts were slow to realize how serious the economic downturn would become and faulted himself for not doing more to explain why it was in the public’s interest to rescue the financial firms that helped cause the crisis.
“Every time I saw a bumper sticker which said, ‘Where’s my bailout?’ it hurt,” the newspaper quoted him as saying.”
In sum, the executives of many of America’s financial companies hurt a lot of people in 2008 and the political system protected them.