Commentary: Fed waited too long to deflate credit bubble

05/3/2010 | Washington Post, The

Former and current Federal Reserve chairmen Alan Greenspan and Ben Bernanke continue to defend central bank policies that many say allowed the credit bubble to inflate and cause the economic crisis. "The costs of waiting to respond to an asset bubble until after it has burst can be very high," said William Dudley, president of the Federal Reserve Bank of New York. Writing in a Washington Post commentary, Roger Lowenstein notes that "Bernanke has been reluctant to intervene in bubbles because of his philosophical belief that the markets generally get it right."

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