By Chris Cermak Aug 25, 2009, 18:36 GMT
Washington - US President Barack Obama on Tuesday reappointed Ben Bernanke to a second term as chairman of the Federal Reserve Board, electing stability over change in a time of economic crisis.
Obama made the announcement on the vacation island of Martha's Vineyard in Massachusetts, where the president and his family are currently on holiday. Another term for Bernanke, 55, will require US Senate confirmation.
'Ben Bernanke has led the Fed through one of the worst financial crises that this nation and the world has ever faced,' Obama said, crediting the central bank head with helping to bring Wall Street back under control.
'Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall,' Obama said.
Most economists surveyed in the past weeks had called for Bernanke to remain on the job. US stocks climbed about 1 per cent Tuesday morning in Wall Street trading after the announcement, but had pared some of the gains by the afternoon.
Bernanke has been in charge of the US money supply and large areas of banking and financial regulation during the ongoing recession, which grew out of a crash in housing prices and turned into a global crisis last year as mounting mortgage defaults sparked panic on Wall Street.
He has won praise for his handling of the fallout from the economic crisis. The Fed has lowered interest rates to a historic low of close to 0 per cent and sharply expanded its money supply in order to provide financing to banks on the verge of collapse.
But Bernanke also drew sharp criticism from many lawmakers for failing to heed the warning signs and help avert the financial meltdown, which began with the collapse of investment powerhouse Lehman Brothers in September.
'While I have serious differences with the Federal Reserve over the past few years, I think reappointing Chairman Bernanke is probably the right choice,' Senator Christopher Dodd, the Democratic chairman of the Senate Banking Committee, said in a statement.
Bernanke's chief task in his second term will be unwinding many of the drastic measures the central bank has used to stabilize the financial system. The government has also taken controlling stakes in a number of banks and car companies.
The Obama administration is looking to boost the Fed's role as a regulator - part of a major overhaul of financial regulation in the United States.
Bernanke in brief remarks said he would 'work to the utmost of my abilities ... to help provide a solid foundation for growth and prosperity in an environment of price stability.'
Bernanke, a Republican appointed by former president George W Bush to succeed long-serving Fed chief Alan Greenspan, started a four-year term in February 2006. He came into the job after nearly 20 years as a Princeton University professor who specialized in the Great Depression.
His current term expires on January 31.
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