MercoPress. South Atlantic News Agency

Obama confirms nomination of Bernanke as head of the Federal Reserve

Bernanke “helped put the brakes on our economic free-fall” said Obama

President Barack Obama confirmed Tuesday that he has nominated Ben Bernanke for another term as chairman of the US central bank, the Federal Reserve. The president took a break from his summer holiday to make the announcement.

Mr Bernanke has been praised for taking action to bail out failing banks, which Mr Obama believes has limited the effects of the economic crisis.

Mr Bernanke's initial four-year tenure is to come up for renewal in January.

Mr Obama said Mr Bernanke had helped prevent a repeat of the Great Depression.

“Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and outside-the-box thinking that has helped put the brakes on our economic free-fall,” the president said.

“Our auto industry is showing signs of life. Business investment is showing signs of stabilising. Our housing market and credit markets have been saved from collapse.

”Taken together, all of these steps have brought our economy back from the brink. They are steps that are working,“ the president said.

Mr Bernanke said that the Federal Reserve had ”been challenged by the unprecedented events of the past few years“.

And he vowed that, if confirmed in his post by the Senate, to work with his fellow Fed members towards ”growth and prosperity in an era of price stability”.

The Fed, along with the US Treasury, organised the 700 billion US dollars bank bail-out plan in October 2008, and has since spent an additional 3 trillion USD propping up the credit markets and trying to boost the economy.

There had been speculation that Mr Bernanke would be replaced, perhaps by Larry Summers, who is the White House chief economic adviser.

But that would have gone down very badly with the financial markets, which see Mr Bernanke as the person who almost single-handedly staved off a meltdown, says the BBC's Greg Wood in Washington.

Mr Bernanke was named as Federal Reserve chairman by Mr Obama's predecessor, George W Bush, in 2005. His re-appointment must be confirmed by the Senate. (BBC).