On the recordJanuary 18, 2012
Our economy today continues to suffer after shocks from the biggest financial meltdown since the Great Depression. Today we understand a series of mistakes were made in the past decade which led to our current financial crisis. Now the Financial Crisis Inquiry Commission, FCIC, was given the task to investigate the causes of the meltdown of our financial institutions. Though the commission was unsuccessful in reaching a certain consensus of the exact cause, they did, however, conclude that the financial crisis was avoidable and was the result of the following factors, an explosion in risky subprime lending, an unsustainable rise in housing prices, widespread reports of egregious and predatory lending practices, dramatic increases in household mortgage debt, and exponential growth in financial firms' trading activities, unregulated derivatives, and short-term repo lending markets, just among a few of the red flags. Surely with all those factors Chairman Bernanke should have been more concerned. In fact, the title of my speech this morning is, ``Even with Warning Signs, Bernanke Failed to Sound the Alarm.'' In fact, he was warned by members of the Federal Reserve Board often. The release of transcripts from the Federal Open Market Committee, FOMC, meetings in 2006 shed light on the critical failures of the Federal Reserve and Mr. Bernanke to act when the warning signs were clear and present.…
