Fed should have the courage to act

ON the advice of his wife, former US Federal Reserve chairman Ben Bernanke chose the title The Courage to Act for his memoir, published earlier this month, of the US subprime crisis, the title being a reference to the central bank under his guidance having the guts to take the unprecedented actions it did to prevent a Great Depression.

Despite knowing that bailing out "too big to fail" fat cats on Wall Street would prove hugely unpopular and controversial with the non-Wall Street public, Mr Bernanke - an avid student of depression economics and an avowed believer in monetary policy as a powerful tool to boost wages, employment and the economy - did what he says was absolutely necessary to stave off a total collapse of the financial system.

Fair enough, and even though there will be critics who might quite reasonably argue that his 500-page volume could easily have been cut by half and titled The Courage to Print Money, the fact remains that the US did avoid a depression and the financial system has stayed afloat.