Newspaper article The Morning Bulletin (Rockhampton, Australia)

US Saved from a Depression? after Near-Financial Meltdown

Newspaper article The Morning Bulletin (Rockhampton, Australia)

US Saved from a Depression? after Near-Financial Meltdown

Article excerpt

THE causes of last year's financial upheaval remain hotly debated, but many analysts say a swift and massive response by US authorities may have averted another Great Depression.

A year after the collapse of Lehman Brothers and a near-meltdown of the financial system, a fragile recovery appears to be underway that will put a bookmark on the worst crisis of the post-World War II era.

Perhaps the most important player in the crisis was Federal Reserve chairman Ben Bernanke, a scholar of the 1930s determined to avoid a repeat of that economic devastation.

"The Fed's policies averted a second Great Depression," says Joseph Brusuelas, at Moody's Economy.com.

"Under Bernanke's leadership, the Fed's unorthodox response to the crisis is without precedent. It has slashed the policy rate to zero and flooded the financial system with liquidity."

Brusuelas said the Fed's series of liquidity programs "slowly rebuilt confidence in the banking system" and helped unfreeze credit markets to help revive economic activity. …

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