Bernanke, Ben

The financial crisis, I think, is the unwinding of what was an excessive credit boom in the years up through middle of last year.  For a variety of reasons global interest rates were quite low, and that generated strong efforts to reach for yield, as it was said, and so there was a lot of risk taking. There was a lot of financial innovation. And the result I think was some unsustainable investment, some unsustainable asset creation.

We've seen the unwinding of that. That is in some ways positive. But on the other hand, the contraction of credit and the restriction of financing that we've seen associated with that has slowed the economy and has had adverse effects on families, as you indicate.    We are trying to find a financial stability. The Fed is working as best we can to stabilize the economy and to stabilize the financial system.

From the Q&A session