Former Federal Reserve Chairman Ben Bernanke sat down with USA Today to discuss the 2008 financial meltdown. The economic whiz shared just how serious the situation was and said more corporate executives should have gone to jail.
Bernanke retired from the Federal Reserve in 2014 after eight years serving as chairman. He had been appointed by President George W. Bush and was directly involved in salvaging the U.S. economy after the financial crisis of 2008.
According to Bernanke, the economic downturn could have been even more catastrophic than it was.
“I think there was a reasonably good chance that, barring stabilization of the financial system, that we could have gone into a 1930s-style depression," Bernanke told USA Today. "The panic that hit us was enormous — I think the worst in U.S. history."
"It would have been my preference to have more investigation of individual action," Bernanke said, "since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm."
"The Fed is not a law-enforcement agency,” Bernanke added. "The Department of Justice and others are responsible for that, and a lot of their efforts have been to indict or threaten to indict financial firms. Now a financial firm is of course a legal fiction; it's not a person. You can't put a financial firm in jail."
The former Fed chairman said it took time for analysts to realize the severity of the financial crisis and that the complexity of the crash made it difficult for him to explain why the banks had to be saved.
"Every time I saw a bumper sticker which said, 'Where's my bailout?' it hurt," Bernanke told Capital Download, according to USA Today.
Bernanke's memoir, “The Courage to Act: A Memoir of a Crisis and Its Aftermath,” will be published on Oct. 6.