Ben Bernanke's Fed

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Radical Risk Management

A New Policy Focus for the Fed

Most of Ben Bernanke’s agenda for change at the Fed— inflation targeting, plain speaking, a more democratic committee, more reliance on models and research, and a lower profile for the chairman—was clear as he entered the job. Perhaps the biggest surprise has been his strong embrace of a risk-management approach to policy—that is, basing policy not just on the most likely outcome for the economy, but also on the risks around that outcome. Other central bankers, including Alan Greenspan, also believed in risk management, but the Bernanke Fed has taken risk management to a new level.

I believe ...