Are Wall Street bankers guilty of criminal activity during the 2008 financial crisis? Ben Bernanke seems to think so, according to a new interview with USA Today’s Susan Page.
One very simple question has been asked over and over with respect to the crisis: Why have so few Wall Street bankers gone to jail for their role in bringing about the greatest financial disaster the United States has seen since the really Great one? Many explanations have been put forward.
An obvious one, of course, is that bankers did not commit any fraud or do anything illegal. Ben Bernanke—chair of the Federal Reserve during the crisis, now retired—does not agree with that answer. In the interview with Page, he said that more people should have gone to jail.
“Why didn’t anyone go to jail?” Page asked Bernanke. “Should somebody have gone to jail?”
“Yeah, I think so,” he replied. Bernanke was promoting his memoir The Courage to Act, which details the Fed’s response to the crisis.
Bernanke’s partial explanation for the bankers’ get-out-of-jail-free card is that the Department of Justice—which, he emphasizes, is ultimately responsible for prosecuting the bankers—has targeted financial firms rather than individuals.
“A financial firm, of course, is a legal fiction, you know, it’s not a person,” he explained. “You can’t put a financial firm in jail.”
“It would have been my preference to have more investigation of individual actions because obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm. In that respect, there should have been more accountability at the individual level,” Bernanke continued.
He did not mention any specific individuals that he felt should be targeted.
Bernanke also said he understood the frustration over the massive bailouts of the financial sector. “Every time I saw a bumper sticker which said, ‘Where’s my bailout?’ it hurt,” he said, in a rare emotional moment.
Watch the full USA Today interview here.