WASHINGTON (MNI) – The following is the text of the transcript
of an interview between Federal Reserve Chairman Ben Bernanke and ABC
News which is scheduled to air on ABC at 6:30 p.m ET March 27:
DIANE SAWYER: Well, I just want to follow up on a couple of things
though they seemed to have reacted to. They seem to feel that you are
pretty much saying it’s guaranteed that till the end of– the end of
2014 that short term interest rates are gonna be kept near zero. Is that
pretty– a guarantee, is that ironclad, that’s–
CHAIRMAN BERNANKE: No– we– we’ve never– issued a guarantee.
We’ve said very clearly that that’s our best estimate, that– we’re
trying to tell the public first of all, you know, how we see the economy
evolving and if the economy does evolve that way here’s how we plan to
react to that. But of course if the economy looks different, if– things
get a lot stronger or a lot weaker we’ll have to change– have to change
our plans.
DIANE SAWYER: What is the measure– what is the trigger that make
you say we have to change our plans? Would it be– what kind of
inflation concern?
CHAIRMAN BERNANKE: Well, we have to look both at growth and
inflation. And both sides are our responsibility, our mandate to look at
both sides. And we look at both sides. It’s a committee decision. We
have– 17 people around the table, we meet eight times a year, we talk
about the economy. We try to assess whether the economy is making
sufficient progress, whether inflation is under control and what our
tools are, w– are they effective? So it’s not something I can give, you
know, sort of a precise– set of– indicators or precise set of
conditions. It’s something that we’re gonna have to keep thinking about
and evaluating as we go forward.
DIANE SAWYER: Unemployment. You said three years ago that you th–
in two– in 2010 you said you thought it’d be four to five years before
we saw normal employment in this country, normal unemployment number in
this country, so that would take us to another three years?
CHAIRMAN BERNANKE: Well, it still could be a few more years. We’re
at 8.3– before the-recession, normal was probably between 5 and 6%,
which is– a healthier level of unemployment. Depending on how fast the
economy grows we could move towards that more quickly or more slowly.
But– unless we get faster growth than we’ve been seeing it is probably
gonna take a while still.
DIANE SAWYER: So another three years or five years?
CHAIRMAN BERNANKE: It could be– it could be a few more years, but
remember we’re making progress the whole time. And so things are getting
better and– that’s at least– moving in the right direction.
DIANE SAWYER: So are you sticking with the three years?
CHAIRMAN BERNANKE: Well– you know, we can make guesses–
DIANE SAWYER: Or have you revised it to a little more optimism?
CHAIRMAN BERNANKE: –we can make guesses. No, I– I think we’re
still sort of in that general vicinity. But it’s very imprecise. I don’t
want to convey the sense that we know exactly when– things will be back
to– completely to normal.
DIANE SAWYER: Do you hold up real hope that by the end of this year
we’ll be below 8%?
CHAIRMAN BERNANKE: Well, our forecasts are that– we’ll be close to
8%, something like that. But that depends very much on how fast the
economy grows. If it continues to grow at– at a moderate rate– sort
of– 2-2.5%– then we might not make much more progress this year. If it
picks up, which is a possibility– we could do better. Obviously we
hope– to make more progress. But– you know, we’re not– again as I
said before we’re– we’re cautious.
DIANE SAWYER: Another quantitative easing on the table, always
possible?
CHAIRMAN BERNANKE: Well, we don’t take any options off the table.
We don’t know what’s gonna happen in the future and we have to be
prepared to respond to however the economy evolves. But again we have 17
people around the table. We look at the economy– comprehensively and–
and review it– at every meeting and we try to assess, you know, how
much progress we’re making and what else we can do that will help us
achieve both the growth we want, the reduction in unemployment we want,
but also maintain the price stability, the low inflation which is the
other part of our mandate.
DIANE SAWYER: As you know there’s been a rising concern about
income inequality in this country and also about the feeling that the
banks have been given special circumstances, as somebody said, the rules
were rigged in favor of the bank. And– and– an economist said to ask
you this, that you know, you gave a lifeline to the banks. What can you
do to get them to start lending to small businesses?
CHAIRMAN BERNANKE: Well– you know, we– we did what a central bank
is supposed to do is we did what was necessary to stop the financial
crisis. We were facing a global financial meltdown which would have
brought down the world economy. And that was just something we couldn’t
allow to happen. And it wasn’t a question of helping banks, it was a
question of helping everybody, the whole economy. Now, going forward–
you know, we’ve– we’ve imposed a lot of new rules on the banks. And
we’re–
DIANE SAWYER: Which they don’t like.
CHAIRMAN BERNANKE: Which they don’t like. And you know, we’re gonna
be much tougher. And we have– very importantly–
DIANE SAWYER: Tougher still?
CHAIRMAN BERNANKE: We continue to be tougher and we’ll continue
to– add– the rules necessary to make sure that they’re– operating in
a safe manner, in a way that doesn’t endanger– our economic system. In
terms of lending we’ve emphasized to the banks the importance of making
loans to– to good borrowers, that’s– that’s the reason the financial
system’s so important because– our system lives on credit.
DIANE SAWYER: Is there more you can do? Is there anything more you
can do?
CHAIRMAN BERNANKE: Well, we’re doing– a lot and we’ll do more. I
mean, we are– meeting with the banks regularly. We have our examiners–
looking at their lending and do– we’re doing everything we can to make
sure that we as examiners aren’t artificially constraining their– their
lending. And we are seeing some progress. For example– lending to
medium and larger businesses is– is– is definitely up. And we’ve seen
modest improvement at small business level, as well.
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** MNI Washington Bureau (202) 371-2121 **
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