Alan Greenspan defended his tenure Wednesday as head of the Federal Reserve before a panel investigating the roots of the financial crisis. As he has in the past, Greenspan disputed critics who say he kept interest rates too low for too long, encouraging risky lending.
Greenspan also hit back against criticism that his Fed failed to regulate high-risk loans to borrowers who couldn’t afford the debt. Many of those loans became the toxic assets that sparked the crisis.
Testifying to the Financial Crisis Inquiry Commission, Greenspan insisted the Fed lacked authority to regulate the nonbank lenders that issued subprime mortgages.
Borrowing falls again during February
Consumer borrowing fell again in February, reflecting weakness in credit cards and auto loans. Analysts said the sharp reduction showed that the weak economy is still making consumers hesitant to take on more debt.
The Federal Reserve said Wednesday that borrowing declined by $11.5 billion in February, surprisingly weaker than the $500-million gain that economists had expected.
The February decline was the 12th decrease in the past 13 months as consumers slash borrowing in the face of a deep economic recession and high unemployment.
Housing market, jobless rate worry Bernanke
Problems in the housing market and high unemployment are the biggest economic challenges the nation faces, Federal Reserve Chairman Ben Bernanke said Wednesday.
After suffering through the worst recession since the 1930s, the economy seems to have stabilized and is growing again, Bernanke said. But he warned of rising foreclosures and problems with the job market.
RETAIL: Book sales fall slightly in U.S. in 2009
U.S. book sales fell 1.8% last year to $23.9 billion, led by a drop in educational books, according to data released Wednesday by the Association of American Publishers.
Elementary- and high-school book sales plunged 14% to $5.24 billion from $6.08 billion in 2008, AAP said. Paperbacks for adults dropped 5.2% to $2.24 billion from $2.36 billion.
HIRING: More CEOs say they expect to add jobs
For the first time in two years, more CEOs expect to be adding jobs than cutting jobs.
A survey released Wednesday by the Business Roundtable, an association of CEOs of big U.S. companies, says 29% of chief executives expect to increase corporate payrolls over the next six months, while 21% predict that their workforces will shrink. Half see no change in jobs.
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