4 Dec 2009

Bernanke defends Fed response to crisis

1:22 pm on 4 December 2009

The US Federal Reserve chairman Ben Bernanke has defended the central bank's response to the global crisis, at a Senate committee sitting to consider his nomination for a second four-year term.

Under Mr Bernanke's tenure, the Fed has cut interest rates close to zero, as well as spending $US3 trillion to buoy the credit markets, the BBC reports.

Mr Bernanke says a retreat from low interest rates will need to be carefully judged, and he is committed to doing so in a way that supports job creation and fosters continued price stability.

Both houses of Congress are moving legislation to cut the Fed's powers.

They want an audit of the central bank's interest rate decisions, weaker regulatory powers over banks, and a reduced role for private bankers in the 12 regional Fed banks.