Bernanke Approved By Senate for Another Term Atop Fed

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January 28, 2010 Thursday 04:51 PM EST

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Bernanke Approved By Senate for Another Term Atop Fed

Jesse A Hamilton

WASHINGTON

Though the re-confirmation of Ben Bernanke as chairman of the U.S. Federal Reserve had been debated vigorously on Capitol Hill, his eventual confirmation slid through the Senate relatively easily, passing with a 70-30 vote.

The reputation of Bernanke, who had originally been appointed in 2005 by President George W. Bush, had been tarnished during the federal bailout of the U.S. financial system. He was accused by critics of missing warning signs prior to the onset of the financial crisis and has more recently been tainted by controversy over the Fed’s handling of American International Group Inc.’s bailout.

President Barack Obama, at the start of his presidency, elected to keep Bernanke in the office. And more recently, Obama chose again to retain that continuity at the helm of the nation’s central bank, appointing him to a second term.

Bernanke, 56, recently wrote a letter to the acting comptroller general at the Government Accountability Office welcoming a full review by the GAO of the central bank’s role in AIG’s treatment of its counterparties, which some critics contend cost taxpayers unnecessary billions. Bernanke said the Federal Reserve would free up “all records and personnel necessary.” He wrote that he welcomed the review “to afford the public the most complete possible understanding of our decisions and actions in this matter” (BestWire, Jan. 20, 2010).

In recent days, leaders in both parties had predicted Bernanke would win the confirmation vote (BestWire, Jan. 25, 2010). Still, a number of prominent senators — including Sens. Richard Shelby, R-Ala, and John McCain, R-Ariz. — stood with the largely Republican opposition.

The successor of Alan Greenspan had his supporters, too. “Over the last year, the chairmanship of Ben Bernanke has in no small measure made it possible for this nation to avoid a catastrophe that I think would have loomed as large as the Great Depression — and maybe larger because of the global implications of the decisions that needed to be made,” said Sen. Chris Dodd, chairman of the Senate’s Banking, Housing and Urban Affairs Committee, in a statement. “Had it not been for Ben Bernanke as the chair of the Federal Reserve, I think we would be looking at a very different America today.”

(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)

January 29, 2010

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