Bernankes comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called “too big to fail companies” like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.
A small-business owner complained to Bernanke that such actions were “hard to swallow,” saying he felt like small businesses - also struggling to survive the recession and all the financial fallout - were being shortchanged.
“Nothing made me more frustrated, more angry, than having to intervene” when companies were “taking wild bets,” Bernanke said. - - - - >

“Prudent financial institutions will recognize that the profits theyre enjoying are in part a reflection of the commitment government and the broader society have made to the financial system that has enabled them to enjoy those profits,” Summers said in an interview with Bloomberg News yesterday in Washington.
While Summers, President Barack Obamas chief economic adviser, didnt identify any firms, he said the government will disclose names as part of reports on loans and foreclosures. Last week, Goldman Sachs Group Inc. reported record quarterly earnings, while JPMorgan - - - - >

“Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected,” Obama said, referring to criticism of the governments growing role in the economy and markets.
Obama, in an interview with Bloomberg News on the eve of the release of his plan to revamp financial-market regulation, voiced confidence the economy would recover soon, while warning that robust growth was needed if the U.S. is to rein in its budget deficit without raising taxes on most Americans. - - - - >

“Wall Street seems to maybe have a shorter memory about how close we were to the abyss than I would have expected,” Obama said in an interview with Bloomberg Television today at the White House. “All were doing is cleaning up after the mess that was made.”
The administration will unveil its proposal for revamping financial rules tomorrow, an effort likely to result in the most sweeping overhaul since the 1930s. Many of the changes will need to be approved by Congress, where jurisdictional and ideological clashes - - - - >

They also took aim at Bank of America Chief Executive Officer Kenneth Lewis, questioning whether he played dumb last fall as Merrills financial losses mounted and threatened not to go through with the merger to squeeze money from the government.
“Why did a private business deal announced in September and approved by shareholders in December - with no mention of government assistance - end up costing taxpayers $20 billion in January?” asked Rep. Edolphus Towns, D-N.Y., chairman of the House Oversight and Government Reform Committee.
The panel has been investigating the deal, including whether federal officials pressured Lewis and urged him to - - - - >

The officials also foresaw “significant reputational consequences” for the bank if it abandoned the deal, warning that investors would conclude Bank of America was “too weak” to complete the acquisition, according to a memo of “talking points” prepared by two senior Fed officials. The memo was part of a package of internal Fed documents obtained by subpoena by the House Oversight Committee.
The documents offer insight into Fed officials views on the danger of Bank of America Chief Executive Officer Kenneth Lewis backing away from the Merrill - - - - >

At the same time, Bernanke is likely to face tough questions by lawmakers at a hearing Tuesday before Congress Joint Economic Committee about the Feds multitrillion-dollar efforts to bust through credit clogs and get banks lending more freely again to people and businesses.
Lawmakers worry that the Feds lending programs, as well as the governments bailout of insurance giant American International Group and taxpayer aid to Citigroup, Bank of America and others, will encourage companies to take excessive risks because Uncle Sam will clean up their messes.
Moreover, the panels chair, Rep. Carolyn Maloney, D-N.Y., and other lawmakers, have pushed the Fed - - - - >

Any policy decisions would come Wednesday.
Fed Chairman Ben Bernanke and his colleagues have already ratcheted down a key lending rate for banks to a record low near zero. To ease the impact of the recession, economists predict the Fed will keep its targeted range for its bank lending rate between zero and 0.25 percent at this weeks meeting and probably well into next year.
Fed officials have left the door open to announcing a new relief program, though they havent hinted in recent weeks of any new efforts.
“I think the Fed will want to convey a message of continued determination,” said - - - - >

A letter from New York State Attorney General Andrew Cuomos office sent to Congressional leaders and federal regulators said Lewis testified in February that former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke threatened to oust Bank of Americas management if the bank tried to back out of buying Merrill Lynch.
The government helped orchestrate the acquisition of the investment bank by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off one of the most intense periods of the financial crisis.
Bank of America completed its purchase of New York-based - - - - >

Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78 percent, Freddie Mac said yesterday in a statement. The rates are the lowest in records dating to 1971, and come after Bernanke told Congress in November that helping the most creditworthy borrowers was essential to reviving the economy.
Mortgage applications in the U.S. rose for the fourth straight week last week as a decline in borrowing costs spurred homeowners to refinance, while purchases of new houses unexpectedly rose in - - - - >