President Barack Obama Tuesday awarded Federal Reserve Chairman Ben Bernanke a second term, saying his bold "out-of-the-box" thinking would help steer the US economy out of the worst slump since the 1930s.
Obama suddenly interrupted his vacation on the resort island of Martha's Vineyard to make the announcement, praising Bernanke's battle against "one of the worst financial crises that this nation and the world have ever faced."
Lauding the cerebral Bernanke for learning lessons of the 1930s Great Depression, and his background, temperament, courage and creativity, he said the Fed chief was the ideal man to help lead the economic rebound.
"Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and out-of-the-box thinking that has helped put the brakes on our economic freefall," Obama said.
The president warned however that the economy and the financial system had a "long way" to go before its full health was restored.
Bernanke, 55, is expected to win Senate confirmation for his reappointment, but could face stiff questioning from some lawmakers who believe he did too little to stave off the recession and protect consumers.
Obama's announcement, on what aides had billed as a "no news" vacation, prodded stocks upward from the opening bell with the Dow Jones Industrial Average up 54.79 points (0.58 percent) at 9,564.07 in morning trade.
It may also dampen criticism of the president's economic management on a day when his Office of Management and Budget projected a huge 9.05-trillion-dollar US government budget deficit over the next 10 years, up two trillion dollars from its previous estimate.
Obama's move could also suck media interest away from a flurry of lawmakers' town hall meetings featuring attacks on his limping health care reform plan and a new row over Bush-era "war on terror" tactics.
Obama's praise for Bernanke read like a defense of his own economic policy, which is facing mounting opposition as his political approval ratings decline.
"Almost none of the decisions that he or any of us made have been easy," he said, mentioning auto and financial industry rescues and his administration's bumper economic stimulus package.
"Taken together, this bold, persistent experimentation has brought our economy back from the brink."
Bernanke admitted the Federal Reserve had been challenged by the unprecedented events of recent years.
"We have been bold or deliberate as circumstances demanded," he said, adding that his objective was to restore a stable financial and economic environment.
Some experts had predicted that Obama would replace the central banker with one of his top advisors Larry Summers for the new term beginning next year.
"There's been a lot of speculation out there, and the president wanted to put it to rest," spokesman Bill Burton said.
Bernanke was selected as Federal Reserve chairman by Obama's predecessor George W. Bush in 2005 to replace retiring Fed chairman Alan Greenspan, who served for 18 years and presided over a golden era of economic prosperity.
He has enjoyed broad support on Wall Street, for the sweeping and sometimes unorthodox methods he has used to save the banking sector, redefine the financial industry and keep the recession from turning into a depression.
Senate banking committee chairman Chris Dodd said Obama had probably made the right choice but vowed to hold a "thorough and comprehensive confirmation hearing."
He criticized the Fed chief for being "too slow to act during the early stages of the foreclosure crisis," although the senator acknowledged that Bernanke "ultimately demonstrated effective leadership and his reappointment sends the right signal to the markets."
Democratic Senate Majority Leader Harry Reid said he backed Bernanke's nomination, saying it would bring "continuity" to the Fed and "send the right signal to the marketplace," and predicted he would win Senate confirmation.
The Financial Services Forum, comprised of 17 top US financial services firms, welcomed Obama's move.
"His understanding of the crisis and experience combating it will be critical as regulatory authorities work together to further normalize markets," said the group's president Rob Nichols.
Source: AFP Global Edition
