Mr. Bernanke's entry in Harvard University's 1975 yearbook.Tina Fineberg for The New York TimesSigns of Academic Prowess
The son of a pharmacist in Dillon, S.C., Mr. Bernanke wins the state spelling bee in sixth grade, only to falter in the national championship on the word "edelweiss." In high school, he teaches himself calculus because his school does not offer it. He earns the highest SAT scores in the state the year he applies to college. He goes on to study economic history at Harvard and earns a doctorate in economics at M.I.T.
Mr. Bernanke in 2001, when he was a professor of economics and public affairs at Princeton University.Denise Applewhite/Princeton UniversityA Leading Monetary Economist at Stanford and Princeton
As a Princeton economist, Mr. Bernanke advocates explicit targets for acceptable inflation as a way to keep prices in check. And he breaks new ground on the causes of the Depression by arguing that the problems were made worse because the United States and many other countries clung to the gold standard.Nominee for Fed Board
President Bush selects Mr. Bernanke as his nominee for a vacant position on the Federal Reserve Board of Governors. The board had lacked economists with deep experience in monetary policy and the standing to debate or even disagree with Alan Greenspan, the Fed chairman, over interest rates. At the Fed, Mr. Bernanke speaks bluntly about weakness in the job market, the dangers of deflation, the impact of higher oil prices and the need for the Fed to reduce uncertainty by being more open.
President George W. Bush and Mr. Bernanke on June 21, 2005, after Mr. Bernanke was sworn in as chairman of the Council of Economic Advisers.Alex Wong/Getty ImagesMoving Up and Into Politics
President Bush says he will nominate Mr. Bernanke to head his Council of Economic Advisers. Mr. Bernanke has previously avoided partisan political issues, at least in public. He has said little about issues at the top of Mr. Bush's agenda, like Social Security and tax cuts, and his economic writing betrays few hints of political ideology.
President Bush announced his nomination of Mr. Bernanke in the Oval Office. J. Scott Applewhite/Associated PressChange at Top of the Fed
President Bush nominates Mr. Bernanke to succeed Alan Greenspan as Federal Reserve chairman. Mr. Bernanke promises to continue Mr. Greenspan's anti-inflation policies.Fed Dismisses Mortgage Defaults
The Fed does not foresee a broader economic impact from the growing number of mortgage defaults and home foreclosures, Mr. Bernanke says. And he cautions that heavy-handed regulation of lenders could have the unintended effect of adding to the strain on the troubled housing market.- Speech at the Federal Reserve Bank of Chicago’s Conference on Bank Structure and Competition
- Fed Chief Addresses Foreclosures
Traders on the floor of the New York Stock Exchange.Hiroko Masuike for The New York TimesBeginning of the Crisis Response
As the collapse of the subprime market begins to shake the financial system, Mr. Bernanke tells colleagues on a hastily convened conference call, "The market is not operating in a normal way." The next month, the Fed begins to cut interest rates for the first time in four years.- Conference Call of the Federal Open Market Committee
- Fed Cuts Rate Half Point, and Stock Markets Soar
An Increase in Lending to Banks
The Fed creates the Term Auction Facility, the first of its crisis-era programs to make sure that financial companies can continue to borrow the money they need. During the heart of the crisis, the central bank substantially supplants private sources of financing. At the same meeting, the Fed also approves agreements to provide foreign central banks, and through them foreign financial companies, with all the dollars they need, too.
Bear Stearns headquarters in New York City.Mario Tama/Getty ImagesThe Bear Stearns Takeover
Invoking its emergency powers, the Fed approves a $30 billion credit line to engineer the takeover of Bear Stearns by JPMorgan Chase and announces an open-ended lending program for the biggest investment firms on Wall Street. The Fed's investment eventually is repaid in full, with interest.
Lehman Brothers' headquarters in New York.Mark Lennihan/Associated PressFailure of Lehman Brothers
The Fed and Treasury fail to prevent the bankruptcy of Lehman Brothers, setting off the worst phase of the global financial crisis. Mr. Bernanke later tells the Financial Crisis Inquiry Commission, "I will maintain to my deathbed that we made every effort to save Lehman, but we were just unable to do so because of a lack of legal authority." On the same day, the government does succeed in marrying off Merrill Lynch to Bank of America.$85 Billion Rescue of A.I.G.
The Fed rescues American International Group by lending up to $85 billion to buy assets from the troubled company. The bailout is subsequently expanded several times. The Fed eventually recoups its investment and earns a substantial profit.
The House speaker, Nancy Pelosi, with Treasury Secretary Henry M. Paulson Jr., left, and Mr. Bernanke, right.Brendan Hoffman for The New York Times'I Kind of Scared Them'
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. press Congress for a vast bailout fund enabling the government to buy distressed mortgages at deep discounts from banks and other institutions. They warn that the financial system is falling apart and that the Fed cannot be relied upon to prevent the unraveling by itself. "I kind of scared them," Mr. Bernanke says later. "I kind of scared myself."Bailout of Morgan Stanley and Goldman
The Fed rescues the two surviving major investment banks by making them bank holding companies. The move fundamentally reshapes an era of high finance that defined the modern Gilded Age. Other finance companies, including American Express, CIT and GMAC, are eventually rescued in the same fashion.Stepping In on Mutual Funds
The Fed offers to shore up the health of money-market mutual funds, the common consumer investment funds, by buying up several forms of short-term debt, including certificates of deposit and so-called commercial paper that expire in three months or less. This is part of a rapid expansion of its liquidity programs to cover much of the financial system. The programs also provide significant support to foreign companies.
Citibank's headquarters in Manhattan.Mario Tama/Getty ImagesRadical Plan to Help Citigroup
Federal regulators approve a drastic plan to stabilize Citigroup in an arrangement in which the government could soak up billions of dollars in losses at the struggling bank. The plan is the government's third effort in three months to contain the crisis.$800 Billion in Lending
The Fed and the Treasury announce $800 billion in new lending programs, sending a message that they will print as much money as needed to revive the nation's crippled banking system.
Key Rate Is Cut Almost to Zero
The Federal Reserve enters a new era, lowering its benchmark interest rate virtually to zero and declaring that it will now fight the recession by pumping out vast amounts of money to businesses and consumers through an expanding array of new lending programs.Bank of America Gets New U.S. Aid
The government cements a deal to supply the bank with a fresh $20 billion capital injection and absorb as much as $98.2 billion in losses on toxic assets. The Treasury, the Federal Deposit Insurance Corporation and the Fed will absorb the losses.Worst of the Crisis Is Over
The Obama administration puts the nation's biggest banks on notice that the government could become their biggest shareholder if regulators decide they are not strong enough to weather a deeper-than-expected downturn in the economy. The biggest banks will be required to undergo a new “stress test.”Fed Will Inject $1 Trillion
The Fed sharply steps up its efforts to bolster the economy, announcing that it will pump an extra $1 trillion into the financial system by buying Treasury bonds and mortgage securities. The program brings the term "quantitative easing" into the national lexicon.Seeing Perils Yet to Come
The economy is finally improving, but enough potholes lie ahead that the Fed needs to keep interest rates close to zero, at least until unemployment begins to come down, Mr. Bernanke tells Congress.Despite Critics, a Second Term
After his renomination by President Obama, the Senate gives Mr. Bernanke a second four-year term despite vehement criticism of the central bank's conduct in the years leading up to the financial crisis. The 70-to-30 confirmation vote is the weakest endorsement extended to a chairman in the Fed's 96-year history.$600 Billion Plan to Lift the Economy
Acknowledging that the recovery has faltered, the Fed moves to jolt the economy with a second round of quantitative easing, a bold but risky plan to pump $600 billion into the banking system.
Mr. Bernanke offered a scholarly discussion of monetary policy at a televised news conference.Doug Mills/The New York TimesStepping Out From Behind the Veil
Mr. Bernanke becomes the first Fed chairman to hold regular news conferences as he seeks to improve the central bank’s image and clarify its actions.A Vow to Keep Rates Near Zero
The Fed makes a rare promise to hold short-term interest rates near zero through at least the middle of 2013, a sign that it has all but written off the chances of an expansion strong enough to drive up wages and prices.Shifting Debt Holdings
The Fed announces an unconventional plan to reduce borrowing costs for businesses and consumers, trying once more to ignite economic growth despite urging from Republicans that it refrain from any expansion of its stimulus program. Under the plan, known as Operation Twist, it will buy another $400 billion of Treasury securities, using money raised by selling its holdings of short-term federal debt, in an attempt to drive down interest rates on mortgage loans, corporate bonds and other forms of credit.Now, Low Rates Until Late 2014
Declaring that the economy will need help for years to come, the Fed says it will extend by 18 months the period that it plans to hold down interest rates in an effort to spur growth. The decision continues the transformation of a policy that began as shock therapy in the winter of 2008 into a six-year campaign to increase spending by rewarding borrowers and punishing savers.Remains of the Bailout
The Federal Reserve Bank of New York announces that it has been paid back for loans used to support the government bailouts of Bear Stearns and the American International Group.A Stubborn Economy
In a pattern that has become familiar, the Fed says the economy is growing more slowly than it forecast, in part because its efforts to hasten recovery have proved insufficient. "Like many other forecasters, the Federal Reserve was too optimistic early in the recovery about the pace of recovery,” Mr. Bernanke says. The central bank pledges to buy $267 billion in long-term Treasury securities over the next six months as part of a continuing campaign to reduce borrowing costs.A Third Round of Easing
The Fed opens a new chapter in its efforts to stimulate the economy with a third round of quantitative easing, saying it intends to buy large quantities of mortgage bonds, and potentially other assets, until the labor market improves substantially. “The weak job market should concern every American,” Mr. Bernanke says.
Mr. Bernanke said that the agency was nearing the limits of its ability to help the unemployed. Chip Somodevilla/Getty ImagesTying Rates to Joblessness
The Fed makes it plain that job creation has become its primary focus, announcing that it plans to continue suppressing interest rates so long as the unemployment rate remains above 6.5 percent. It is the first time the central bank has announced a specific economic objective for its stimulus campaign. Officials estimate that the goal will not be reached before mid-2015.Hints of a Change at the Top
Mr. Bernanke provides some insight into his own future. Asked repeatedly at a news conference about his interest in a third term as chairman, he demurs several times before telling one reporter, “I’ve spoken to the president a bit but I really don’t have any information for you at this juncture.”- Fed to Maintain Stimulus Efforts Despite Jobs Growth
- Bernanke Saying He’s Dispensable Suggests Tenure Ending
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