WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke says a key lesson learned from the 2008 financial crisis is that central banks must have a dual goal of controlling inflation while supporting the banking system.
During a speech Tuesday in Boston, Bernanke said the steps the Fed took during the crisis proved to be successful. The Fed lowered short-term interest rates to record lows and expanded its portfolio of Treasury and mortgage-backed securities to push long-term rates lower.
Bernanke also noted that the Fed helped calm markets by being more explicit about its interest rate policy. He said it's a trend that will increase in the future.
The Fed has been criticized by those who say keeping rates too low for too long could fuel higher inflation later.
In September, the Fed voted to shift $400 billion of its investments to try to lower long-term interest rates. That followed the Fed's announcement in August that it planned to keep short-term rates at record lows until at least mid-2013, assuming the economy remains weak.
Both steps were approved on 7-3 votes. That represented the highest level of dissent at the Fed in nearly 20 years.
Bernanke did not address the current state of the economy or possible future moves on interest rates during his speech at the Federal Reserve Bank of Boston. He also did not take questions from the audience.
He used an entrance to the building that was not near an Occupy Boston protest group that has been camped in Dewey Square, across the street from the Boston Fed.
BoA earns $6.2B on accounting gains
NEW YORK (AP) - Bank of America earned $6.2 billion in the third quarter on accounting gains and the sale of a stake in a Chinese bank, which offset lower revenue and income in its credit card, real estate and investment banking businesses.
Bank of America is also no longer the largest bank in the nation by assets, which fell to $2.21 trillion in the quarter. The Charlotte, N.C., bank ceded the bragging rights to rival JPMorgan Chase & Co., which reported total assets of $2.28 trillion.
Goldman Sachs loses $428 million in 3Q
NEW YORK (AP) - Goldman Sachs Group Inc. reported a third-quarter loss of $428 million Tuesday, only the second quarterly loss since the investment bank went public 12 years ago.
Revenue from underwriting stocks and bonds plunged as businesses, unnerved by political wrangling in Washington and volatile markets, held off on new stock and bond offerings. Goldman also lost nearly $3 billion on investments in stocks, bonds and a stake in a Chinese bank.