Ben Bernanke and Alan Greenspan are the former U.S Fed Chairs. These two men have occupied the position of the Federal Reserve for the past 25 years. They have played a great and influential role as the head of the central bank of the U.S. The enormous success of these two men has made them a role model in the eyes of many. Alan Greenspan occupied the position of the Federal Reserve till 2006 after which Ben Bernanke took the charge. Heres looking at the lessons that we can learn from Ben Bernanke and Alan Greenspan.
1. Alan Greenspan followed and repeated the common monetary policy whenever there was a significant crisis. During the 1987 financial crisis, Greenspan affirmed the Feds readiness to supply the required financial system. After that, he increased the interest rates. This policy of Greenspan contributed highly to his success.
2. Greenspan saved the world economy successfully from the 1987 stock market crash. He managed the stable and low inflation under his reign effectively. The way he managed every single crisis was praiseworthy.
3. Bernanke had extraordinary knowledge of central banking that prevented another Great Depression. He believed that the central bank has the capability to energize an economy even when it does not cut any interest rate.
4. Bernanke studied the past in details so that he doesnt repeat any of the previous mistakes. He was successful in avoiding all the policy mistakes that were committed in the 1930s, which resulted into a depression from recession. This step taken by Bernanke helped in preventing the Great Recession from turning into the Great Depression.
5. The consecutive rounds of quantitative easing that was started by Bernanke played a major role in regulating the monetary policy. Bernanke used some innovative tools for regulating the monetary policy for which he got negligible support from Congress.
6. Bernanke did not get discouraged for all the wrong steps that he had taken. One of his early mistakes was allowing Lehman Brothers to fail, post bailing out the Bear Stearns. This act of his petrified the already disturbed investors. However, despite such a wrong decision, Bernanke did not panic. He kept himself composed and managed the economy of U.S well. He worked for the recovery and stability of the U.S economy and was successful in doing so. From Ben Bernanke, we get to learn that there is no need to panic when our first try does not yield results. We should keep our calm and try harder.
These 6 incidents that we get to see from the career of Alan Greenspan and Ben Bernanke can surely provide us with some great insights and knowledge.