(WASHINGTON) — The head of the nation’s central bank says there was little the Federal Reserve could have done to prevent the near financial meltdown of the world economy in 2008.
However, Fed chief Janet Yellen admits that “policymakers failed to anticipate that the reversal of the house price bubble would trigger the most significant financial crisis in the United States since the Great Depression.”
Yellen, who was speaking at a meeting of the International Monetary Fund, also indicated that the Fed has no intention, at least in the near future, of raising record low interest rates, despite fears that they could lead to inflation.
Meanwhile, Yellen expressed confidence that new regulatory policies instituted since the Great Recession will help keep the financial sector in check.
She told the IMF, “I think efforts to build resilience in the financial sector are critical to minimizing the chance of financial instability and the potential damage from it.”
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David Goldman, CNN
Aaron Smith, CNN Newswire
Sam Turner, Deseret News
Jethro Mullen Ivana Kottasova and Patrick Gillespie, CNN