Skip to main content

Ben Bernanke’s work shoring up the American and global economies as Federal Reserve chair during the global financial crisis earned him a mere B-plus from his peers—possibly the first sub-A grade in a life spent as valedictorian and summa cum laude. Luckily for him, the experts look a bit more kindly on his academic record than on his praxis.

The Nobel Memorial Prize in Economic Sciences was awarded on Monday to Ben S. Bernanke, the former Federal Reserve chair, and two other academics for research into banks and financial crises…. Mr. Bernanke in 1983 wrote a paper that broke ground in explaining that bank failures can propagate a financial crisis rather than simply be a result of the crisis.

And while others may think he didn’t do a particularly good job applying those insights, the Beard says he’s sure glad he had them, and not just because of the $300,000 or so they’ve won him (he makes about as much for giving a dinner speech, after all).

“I strongly believed that if [a financial meltdown] happened, that would bring down the rest of the economy,” he said, adding of his research, “it did help me to think about these issues in 2008.”

And, he added, thanks in part to that B-plus work, Jay Powell’s got one less thing to worry about in the upcoming recession he’s causing. And the banks agree.

“We’re not in anything like the dire straits we were in 14 years ago,” Mr. Bernanke said of the state of the U.S. financial system.

The anticipated provisions will be far smaller than the ones made by lenders at the start of the coronavirus pandemic in 2020, when they increased reserves by tens of billions of dollars to brace themselves for an economic shock that was largely avoided thanks to unprecedented monetary and fiscal stimulus…. The six largest US banks by assets — JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Wells Fargo and Morgan Stanley — will collectively provision about $4.5bn in loan-loss reserves in third-quarter earnings….

Nobel Economics Prize: Ex-Fed Chair Bernanke Among Winners for Work on Financial Crises [NYT]
US banks to set aside $4bn for potential losses from bad loans [FT]

Related

Wells Fargo Bless this Mess

Shareholders Of America’s Worst Bank Amply Rewarded For, Uh, Well, We’re Not Sure, Exactly

Charlie Scharf offers bread and circuses to keep the Wells Fargo masses from calling for his head.

Brian Moynihan/Getty Images

You’ve Heard From The Best, Now Hear From The Rest

Wall Street’s also-rans confirm that the second quarter was a good one indeed for banks.

Moynihan (Getty Images)

Brian Moynihan Tries To Call Jamie Dimon A P*ssy With Spectacular Self-Own

Pfffft. Who isn’t living in an unrelenting hellscape all the time? God.

200west

Compensation Watch ’21: Goldman Sachs First Years

Goldman has done very well. Goldman’s kiddies? Maybe less so.

See page for author [Public domain], via Wikimedia Commons

Regulators Unceremoniously Dump Volcker Rule Into Crude Ditch Next To Its Author

But not without delivering another, posthumous “F.U.” to the late former Fed chief.

Wells Fargo Bless this Mess

Wells, BofA Prove Stimulus Is Working By Not Looking Like Dogsh*t In Q1

If even they are inoculated, there’s hope for us all.

west virginia coal mine

Fourth Poorest State In U.S. Commits To Paying More For Financial Services

The bottom line only matters to Republicans when they’re not making cheap populist points.

200west

Goldman Acknowledges Extremely Virulent Disease Spreading Across The Globe, Is Pretty Sure It’ll All Be Over In Two Weeks

Which is when you will be back at your desks, goddamnit, epidemiology notwithstanding.