WASHINGTON Dec 3 Federal Reserve Chairman Ben
Bernanke on Thursday rejected the idea that low U.S. interest
rates were helping to fuel speculation overseas and potentially
inflating dangerous new asset bubbles.
Answering questions at his Senate Banking Committee
confirmation hearing, Bernanke effectively said that if other
countries were worried that was the case, it was their
"It's not the United States' responsibility to ensure that
there are no misalignments on every economy in the world,"
Bernanke said. "I think it needs to be understood that United
States monetary policy is intended to address both financial
and economic issues in the United States."
Earlier this month, a senior Chinese official charged that
the Fed's pledge to keep U.S. rates low for an extended period,
coupled with the weak U.S. dollar, were creating "new systemic
risk" for the global economy.
Chinese banking regulator Liu Mingkang said in Beijing that
there was a "massive" impact on asset prices in other countries
stemming from a "carry trade" in the relatively cheap dollar.
"It is boosting speculative investment in stock and
property markets and will pose new, insurmountable risks to the
global recovery and, particularly, to the recovery in emerging
markets," Liu, chairman of the China Banking Regulatory
Bernanke said countries that are concerned about
speculation "have their own tools to address bubbles in their
economy" and shouldn't look to U.S. monetary authorities to do
the job for them.
(Reporting by Glenn Somerville; Editing by Kenneth Barry)
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