July 27, 2008 / 5:13 AM / 9 years ago

Obama gives Bernanke vote of confidence

3 Min Read

<p>Chairman of the Federal Reserve Ben Bernanke testifies before the House Financial Services Committee on Capitol Hill in Washington July 16, 2008.Larry Downing</p>

CHICAGO (Reuters) - Presidential candidate Barack Obama gave a vote of confidence to Federal Reserve Chairman Ben Bernanke, saying he had made some good decisions in difficult circumstances.

"I think that Chairman Bernanke was handed a pretty tough hand and I think some of the decisions he's made have been the right ones," the presumptive Democratic nominee told Reuters in an interview on Saturday evening.

In a move that some criticized as a bailout, the Fed came to the rescue of investment bank Bear Stearns by helping to broker its takeover by J.P. Morgan Chase.

The Fed and Treasury also offered a financial lifeline to mortgage giants Fannie Mae and Freddie Mac.

Amid a collapse in the housing market and financial turmoil, the moves mark an expansion of the Fed's role in the financial system that has made some wary.

But Obama, speaking on a flight to Chicago as he returned from a seven-nation overseas tour, said he did not want to second-guess the central bank.

"I think it's very hard to second-guess every single decision that has been made because this is a huge, complex economy and the Fed is just one actor among many who have enormous influence on the U.S. economy or for that matter the global economy," said Obama, an Illinois senator who is running in the November election against Republican John McCain.

Bernanke's term as head of the U.S. central bank ends in January 2010 and the next president will decide whether to nominate him for another term.

Obama in a speech in March called for an overhaul of the U.S. financial regulatory structure to try to avoid a repeat of the recent turmoil.

Now that the U.S. Congress approved a market rescue bill on Saturday, Obama said he will convene a meeting to discuss ways to approach the financial regulatory overhaul.

He said he would meet on Monday with former Federal Reserve Chairman Paul Volcker, former U.S. Treasury Secretary Robert Rubin, billionaire investor Warren Buffet and others to discuss the issue.

"This will be a first step in a series of meetings and proposals that we'll be presenting during the remainder of this campaign," Obama said.

Editing by Eric Beech

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