This week, Federal Reserve Chairman Ben Bernanke completed his four-lecture series for undergraduate students at the George Washington School of Business in Washington, D.C. The lectures have been part of the Chairman’s ongoing effort to educate the public about the Federal Reserve and the role it played during the recent financial crisis. Building upon last week’s broad overview of the origin and mission of central banks and the lessons learned from previous financial crises, this week’s lectures—presented on March 27 and 29—centered on the financial crisis that emerged in 2007. The Chairman discussed the build-up of the crisis and the actions taken by the Federal Reserve and other central banks to address the financial crisis and the ensuing recession.
The March 27 lecture focused on the Federal Reserve’s role as lender of last resort. After reviewing the crisis in the mortgage markets and the resulting financial panic, the Chairman turned to a discussion of the actions taken by the Fed, placing the U.S. central bank’s response in the context of a global effort to support key financial markets and institutions. The Chairman explained how the Fed’s aggressive provision of liquidity and initiatives to sustain critical financial institutions succeeded in containing the financial crisis, likely averting a second Great Depression.
In the fourth and final lecture, the Chairman examined the aftermath of the financial crisis. He discussed the conventional and unconventional tools used by policymakers to respond to the recession and reviewed the steps the Fed has taken to enhance communication with the public about its policy actions and strategy. Chairman Bernanke then considered how the lingering effects of the financial crisis are inhibiting a faster recovery from the recession. He concluded by discussing the changes in financial regulation that followed the crisis and the implications of the crisis for central bank practice.
The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.