Bernanke was named "Person of the Year" by Time magazine

Time magazine named Federal Reserve Chairman Ben Bernanke "Person of the Year" on Wednesday, a sign of support at a time he seeks to repel proposals that would erode authority and independence of the central bank.
Time credited Bernanke with creative leadership that ensured 2009 would be a year of recovery, however weak, rather than a catastrophic second Great Depression.
Time managing editor Richard Stengel stated: "The recession was the story of the year. Without Ben Bernanke ... it would have been a lot worse. We've rarely had such a perfect revision of the cliche that those who do not learn from history are doomed to repeat it. Bernanke didn't just learn from history; he wrote it himself and was damned if he was going to repeat it."
Capitol Hill surely noticed Time's selection of Bernanke, an expert on the Depression, which has happened a day ahead of a vote in the Senate Banking Committee on his nomination to a second term. His first four-year term as Fed chief expires on January 31.
Congress is considering proposals that would strip the Fed, which was due to close out a two-day policy meeting on Wednesday, of its regulatory authority over major banks and expose its interest rate decisions to audits.
The only adversary's argument advanced by the Fed and the Obama administration is that banks still show a reluctance to lend despite efforts to prop up the financial system with billions of taxpayers' dollars.
In an interview with Time, Bernanke said banks have been stabilized, but he conceded that lending remains too weak to support a healthy recovery. Banks are wary of taking on the kind of risk that led to the crisis, although they have rebuilt capital, he said.
Among the achievements of Bernanke and his colleagues is the lowering of overnight interest rates to near zero a year ago and pumping of more than a trillion dollars into the financial system to overcome the crisis.
Now it was time to put in place reforms to ward off future crises, according to Bernanke. "We need to have extensive reform in the private sector, in the public sector, to eliminate these risks in the future," he said.
"Even though the recession may be technically over, in a sense that the economy is growing, it's going to feel like a recession for some time, because unemployment remains very high, about 10 percent," Bernanke added.
The Fed was proposed to be made the lead regulatory policing the financial sector for 'systemic" risks by the Obama administration. Bernanke supposed the Fed had never proposed that it be responsible for regulating the entire financial system, although he argued no other agency has its expertise.
Banks have yet to broadly understand the need for more restraint on pay after they were bailed out with taxpayer money, according to Bernanke.
The Fed instituted policies "which we'll be enforcing on banks" that require them to structure pay in ways that align it with performance and discourage excessive risk taking, he said.

Source: The Reuters