Bernanke's speech at the London School of Economics today coincided with my drive to the office so I listened to almost all of it.
Either Bernanke thinks the folks at LSE haven't really been paying attention and needed a recent history lesson, or thought this would be a good soapbox to defend his and Paulson's body of work from 2008.
TARP actions to date, while they have not served to materially increase lending, have helped stabilize the large financial firms and hopefully will prevent another Bear/Lehman situation. The following quote, "In the future, financial firms of any type whose failure would pose a systemic risk must accept especially close regulatory scrutiny of their risk-taking" captures the new paradigm that the large banks must operate under, and does not argue for new large private sector lending increases in the short term. It may be time for TARP funds to flow to smaller banks without reserve issues, who would be happy to lend incremental capital if they had it.
2 comments:
It seems to me that every single time Bernanke gets up there - going back to 2 months ago - he begins with a full 20 minute cover my ass session. I have decided to make my BUY signal the first time he gets up there and does not immediately begin to cover his arse.
wall st vs. main st aside, I think the conclusion is that real market particiapnts are sick of it and sell stocks accordingly
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