“This was Andrew Mellon, the Treasury secretary. It was partly on that basis of that theory that the Federal Reserve stood by and let a third of the banks in the country fail, which created the money supply to drop sharply and caused prices to fall very sharply and led ultimately to the severity of the financial crisis. I think financial instability, which was not addressed by government or anyone else, was a major contributor both to the Depression in the U.S. and abroad. ”
“I believe the difference today is that, you know, that we will address financial issues and try to maintain the integrity and stability of our financial system. We will not let prices fall at 10% a year. We will act as needed to keep the economy growing and stable.”
- Federal Reserve Chairman, Ben Bernanke, April 2nd 2008 to the congressional joint economic committee.