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In brief: Bernanke rules out muni bailouts

Monday 10 January 2011 - by Nicola York

Ben Bernanke has batted down the notion that the Federal Reserve may intervene in the municipal credit markets if debt burdens become unmanageable.

Speaking before the Senate Budget Committee last week, the Fed chairman said that states should not expect loans from the Fed and that it had no intention of getting involved in state and local finance.

Concerns have been mounting recently of a potential crisis in the municipal bonds market because states are struggling to pay off debt thus raising costs for municipal borrowers.

A sudden sell-off of the bonds in November did not help matter, sparking concerns that a bailout might be necessary in the future.

Bernanke said the buck rested with Congress on this issue and said it was not part of the Fed's role.



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READERS' COMMENTS
2011-01-11 04:38:33 | Craig Watson
Ben Bernanke should be charged for perjury considering that the Federal Reserve has already bailed out several states and cities:

http://www.unelected.org/2010/12/30/the-federal-reserves-3-3-trillion-dollar-bailout-of-foreign-banks-and-corporations/

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