Ben Bernanke Quotes

I don't want to create a too-big-to-fail player.

This crisis exposed very significant problems in the financial systems of the United States and some other major economies. Innovation got too far out in front of the knowledge of risk.

At the heart of banking is a suicidal strategy. Banks take money from the public or each other on call, skim it for their own reward and then lock the rest up in volatile, insecure and illiquid loans that at times they cannot redeem without public aid.

I'm really concerned that too-big-to-fail has become too-big-for-trial.

Too big to fail is too big.

The financial system is drifting back to business as usual a bit to quickly …. We are starting to see risky behavior of the sort that people were scared of after the crises

What we have to find is the right level of regulation of our financial system so that it has the incentive to invest in things, but at the same time, it is sufficiently regulated so it can't get in the kind of trouble that we have seen in the past and we have seen recently.

If a financial institution is too big to fail, it is too big to exist.

Limiting the destructive risk-taking by large financial firms and banks which are 'too big to fail' is needed.

We must learn the lessons of the 2008 crash: no company should be able to become too big to fail.

American business would be run better today if there was more alignment between CEOs' interest and the company. For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security... or every loan they made?

The Federal Reserve has a responsibility to ensure the safety and soundness of financial institutions and to contain systemic risks in financial markets.

For market discipline to constrain risk effectively, financial institutions must be allowed to fail. Under optimal financial regulatory and financial system infrastructures, such a failure would not threaten the overall system.

Bailing out every bank that fails makes the system riskier, not safer.

What the American people don't understand is how Merrill Lynch or AIG or Lehman Brothers can reward people, and the entity fails. Not only do the shareholders lose, but the entities lose.

Don't reward bad behavior. It is one of the first rules of parenting. During the financial cataclysm of 2008, we said it differently. When we bailed out banks that had created their own misfortune, we called it a 'moral hazard,' because the bailout absolved the bank's bad acts and created an incentive for it to make the same bad loans again.

No one suggested Lehman deserved to be saved. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman's failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers.

The heart of the 2008 financial crisis was a coterie of reckless financial executives, working for too-big-to-fail financial companies, who were handsomely compensated for taking risks that almost ruined the economy when they failed.

Fannie Mae may have conformed to the rules but the rules didn’t conform to reality. A major bank or financial institution could meet every single regulatory requirement yet still be at the risk of collapse.

You cannot have fairness unless you have transparency…We don’t know that is going on inside those boxes … we could have a meltdown [in the entire economy].

To be sure, booms and busts will come and go. But their severity can vary dramatically based on the policies in place to prevent them. With stronger regulations, neither the housing and derivatives bubbles nor the eventual crash would have been so bad.

We are optimistic with respect to thrifts .... I don't think that there is any cause for undue concern and I would reject any suggestion that we are in the midst of some sort of a major systemic problem with respect to any element of our financial services industry.

I think people have to be very careful with new ideas [in fiancé and economics]. What you need to worry about is when you have something that’s a really good idea, but you get too much of it too fast, like over-the-counter derivatives.

Don't act like a bank unless you are a bank. That was a really big lesson learned from 2008.

The failure of one regional bank, assuming it is following a traditional model, will not threaten the entire system.