Today, the Alliance for Economic Stability, Inc., on its website located at www.eally.org, released a letter to Congress recommending that Federal Reserve Chairman Ben Bernanke not be reappointed citing the Chairman’s complacency before and after the crisis as the organization’s leading factor in its decision.
1. He violated the first and most important guiding principle of fair markets: he failed to make full disclosures at all points relevant to the development and management of the financial crisis.
2. Outwardly he completely failed to at his first and only responsibility: to protect American Families and Workers from excessive risk in the financial sector.
3. There has been no discovery conducted on what he knew and when, and who he told, before the crisis caused Bear Stearns, Lehman, AIG, Freddie Mac and Fannie Mae, and hundreds of banks to fail.
4. He has failed to provide a complete accounting of the total amount of subprime mortgages underwritten and a fair estimate of their current value by sponsor, including Goldman and JP Morgan.
5. He has failed to provide an accounting of the amount of sub-prime derivatives sold to deposit institutions, pension plans and insurance companies including AIG.
6. He failed to identify the beneficiaries of losses resulting from conflicts-of-interest and unethical standards before he caused the creation of new policies and laws allowing cash payments funded by tax payers to be used in transactions that generated extraordinary gains for the private parties that caused the crisis with no protection for tax payers and no penalty or sanction, or consequences, to the improperly benefited private parties.
7. He continues to engage in a manipulation of markets without any estimate of the cost to tax payers of the program or responsibility to account for the negative impact on the nation’s budget and currency value of his actions.
8. He has not proposed any enforcement action or laws that would correct the laws that allowed the crisis.
9. He denied having any responsibility in the crisis yet at the same time blamed the regulators for allowing unethical sales and trading practices and improper underwriting activities that are at the core of his super visionary duties.
10. He has resisted all efforts to increase transparency of the Fed’s controversial emergency measures, and both before and after the crisis he has been complacent about the laws that are now known to be the direct cause of the crisis and the adverse impact of his policies on conservative savers and benefits to speculators.
AES is an organization devoted to encouraging policies that protect savings and investments and that promote a fair financial marketplace. AES has produced a study of FINRA, titled “Securities Regulatory Reform: Addressing FINRA’s Inherent Conflict and Moral Hazard” and a new regulatory rules filing titled “FINRA Moral Hazard Reforms” that was entered into rulemaking by U.S. Securities and Exchange Commission on January 4, 2010.