Special Access:With the Fed Chairman

Throughout the financial crisis,Ben Bernanke,Chairman of the Federal Reserve,has exhibited quiet leadership.Mr.Bernanke recently shared his reflections on the course of the crisis and what might be done about it.Our nation is being tested by economic challenges,the central banker said,but there are more tools the Federal Reserve could use.The Fed could purchase long term Treasury bonds or agency debt.It could backstop liquidity in financial markets beyond banks.Further rate cuts are certainly feasible,but obviously the scope is limited:the Fed funds rate has already been cut to 0.5%.The rate cuts were rapid and proactive.Nonetheless,the Fed's liquidity programs have failed to return private credit markets to normal,although they have been helpful in lowering some spreads.The market itself must ultimately address financial problems.