Bernanke's Legacy

Published in Les Echos
(France) on 20 June 2013
by Guillaume Maujean (link to originallink to original)
Translated from by Deonca Williams. Edited by .

Edited by Laurence Bouvard

 

A successful exit. This must be the obsession of Ben Bernanke, the chairman of the U.S. Federal Reserve, to whom all eyes of the financial world turned to yesterday. The exit is that of the ultra-accommodating monetary policy. In order to support the economy and the markets, interest rates were kept at zero for months while billions of dollars in assets were redeemed each month. The Fed chief had continued to mark the field yesterday. But this exit is also looming over Bernanke’s head as his second term expires in seven months. If the Fed chief has done an "outstanding job," as Obama acknowledged," he's already stayed a lot longer than he wanted or he was supposed to." This was an astonishing statement, but it already raises doubts as to Bernanke’s legacy.

Yet the results of Bernanke’s two predecessors, who were once adored by Wall Street, have now faded. Paul Volcker ended the era of inflation, but this was done at the cost of a severe recession in the 1980s. Alan Greenspan boosted growth, yet the price that was paid for this was the burst of the credit bubble in 2007. So what footprint does Bernanke leave? History will probably forget the "outstanding job" he did after the bankruptcy of the Lehman Brothers, especially if he misses his famous exit. So this task has never seemed so dangerous, especially with such gigantic issues at stake. In terms of the markets, they will have to learn to live without their monthly infusions of cash. On the other hand, the U.S. economy will probably see a parallel rise in the dollar. As a result, the White House will no longer be able to count on the Fed to cheaply finance deficits. Beyond the legacy of Bernanke, it is the credibility of this most important of central banks that will be called into question in the coming months. This credibility is its main asset.


Réussir sa sortie. Ce doit être l'obsession de Ben Bernanke, le président de la Réserve fédérale américaine, vers qui tous les regards de la planète financière se tournaient hier. La sortie, c'est celle de la politique monétaire ultra-accommodante - des taux d'intérêt maintenus à zéro et des milliards de dollars d'actifs rachetés chaque mois - menée depuis des mois pour soutenir l'économie et les marchés. Le patron de la Fed a continué à baliser le terrain hier. Mais la sortie, c'est aussi celle qui se profile pour Bernanke, dont le deuxième mandat s'achève dans sept mois. Si le patron de la Fed a fait un « boulot formidable », a reconnu Barack Obama, « il est déjà resté plus longtemps à ce poste qu'il ne le voulait et qu'il n'était supposé rester ». Etonnante affirmation, qui pose déjà la question de l'héritage que laissera Bernanke.

Car le bilan de ses deux prédécesseurs, autrefois adulés par Wall Street, a bien pâli. Paul Volcker a mis fin à l'ère de l'inflation galopante, mais au prix d'une récession sévère dans les années 1980. Alan Greenspan a relancé la croissance, mais fait le lit de la bulle du crédit qui explosa en 2007. Alors, quelle trace laissera Bernanke ? L'Histoire oubliera sans doute « le boulot formidable » réalisé après la faillite de Lehman Brothers, s'il rate cette fameuse sortie. Or l'exercice n'a jamais paru aussi périlleux, les enjeux aussi gigantesques. Pour les marchés, qui devront apprendre à vivre sans leurs perfusions mensuelles de liquidités. Pour l'économie américaine, qui devra encaisser en parallèle une probable remontée du dollar. Pour la Maison-Blanche, qui ne pourra plus compter sur la Fed pour financer les déficits à bon compte. Et, au-delà de l'héritage de Bernanke, c'est la crédibilité de la première des banques centrales qui sera mise en jeu dans les mois qui viennent. Autrement dit son principal actif.
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