Chairman Ben S. Bernanke At the Greater Austin Chamber of Commerce, Austin, Texas, December 1, 2008
“As you know, this extraordinary period of financial turbulence is now well into its second year. Triggered by the contraction of the U.S. housing market that began in 2006 and the associated rise in delinquencies on subprime mortgages, the crisis has become global and is now affecting a wide range of financial institutions, asset classes, and markets. Constraints on credit availability and slumping asset values have in turn helped to generate a substantial slowing in economic activity…Collectively, the Treasury, the FDIC, and the Federal Reserve are now much better equipped to address potential systemic risks quickly and effectively, and we are firmly committed to doing so. However, measures such as the Capital Purchase Program and the FDIC guarantee are temporary. In the longer term, the development of a statutory framework for resolving systemically critical nonbank financial institutions in ways that do not destabilize the financial system as a whole must be another key priority.”