Is the US Federal Reserve to blame for the 2008 financial crisis?

Critics of the US Federal Reserve suggest that lowering interest rates too much encourages asset bubbles, and that bailing out financial institutions encourages those institutions to take on risk, knowing that that risk will be passed onto the taxpayer.

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Jim Jubak Investing Columnist

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Over the last 20 years, first under Alan Greenspan and then Ben Bernanke, the Federal Reserve has taught Wall Street to expect a reward for bad behavior.

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06 Nov 2007 Source

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Milton Friedman Iconic Economist of 20th Century

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Over the course of a long friendship, Alan Greenspan and I have generally found ourselves in accord on monetary theory and policy, with one major exception. I have long favored the use of strict rules to control the amount of money created. Alan says I am wrong and that discretion is preferable, indeed essential. Now that his 18-year stint as chairman of the Fed is finished, I must confess that his performance has persuaded me that he is right -- in his own case.

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31 Jan 2006 Source

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0 Points the27th 09 May 2010 Stance on Question: Mostly Disagree

To the best of my knowledge, Ben Bernanke was the single greatest actor in mitigating the effects of the recession. He did what Ben Strong would have done.

Is the US Federal Reserve to blame for the 2008 financial crisis?

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