It’s not only financial advisors that can sometimes struggle to get their message across to panicked clients during a downturn in the markets or the economy. Central banks can struggle, too.
Speaking Tuesday to the Economic Club of Canada in Toronto, Ben Bernanke, former chairman of the Board of Governors of the Federal Reserve System, said that he has no regrets regarding the central banks actions during the financial crisis, but wishes that the public better understood those decisions.
While many things were done imperfectly “in the fog of war” of the crisis, said Bernanke, the Fed did what it had to do to avoid a widespread collapse of the financial system and to stabilize the economy.
However, many people don’t seem to understand the reasoning behind those decisions, said Bernanke, and instead saw the central bank’s actions as favouring Wall Street over Main Street — a belief that the former chairman said was unfair.
It’s important that the broader American public understands why the stimulus package was so important to the stabilization of the economy at the time and to its future growth, said Bernanke. However, getting this message across is likely to be an ongoing challenge for the Fed.