“The topic of this session is lessons learned from the financial crisis,” said Chairman of the Federal Reserve Ben Bernanke at the beginning of a speech he delivered on Monday at the London School of Economics. “For me, perhaps the central insight is that the recent crisis, despite its many exotic features, was in fact a classic financial panic–a systemwide run of ‘hot money’ away from assets whose values suddenly became uncertain.”
While he does not have unanimous support from policymakers, or even other central bankers, Bernanke’s position on the recent economic crisis is well understood. The Fed’s dual mandate and Bernanke’s unconventional policy decisions — chiefly to purchase assets and publicly link policy choices to economic conditions — has been the subject of many speeches he has given over the past few years.
Addressing this pattern, Bernanke used his time in England to “tackle a different and more recent issue that has arisen in the aftermath of the crisis–the issue of whether, in the widespread easing of monetary policies, we are seeing a competitive depreciation of exchange rates.”