Bernanke confirmed as U.S. Federal Reserve chairman for second term

WASHINGTON, Jan. 28,  (Xinhua) --

Federal Reserve Chairman Ben Bernanke Thursday won the Senate confirmation for a second four- year term as head of the U.S. central bank.

Bernanke's confirmation, which passed in the Senate by 70 to 30, would be a victory for U.S. President Barack Obama, who had called Bernanke a critical leader in the nation's recovery from recession.

"The Senate did the right thing. Chairman Bernanke will continue to play a vitally important role in guiding the nation's economy," said U.S. Treasury Secretary Timothy Geithner.

Bernanke, 56, was appointed Federal Reserve chief in 2006 by then President George W. Bush, a Republican. Obama, a Democrat, announced that he will nominate Bernanke to a second term in August last year.

No Fed chief nominee has been rejected by the Senate.

Bernanke, whose term expires Sunday, has come under fire for his support of the Wall Street bailout. Critics said the Fed had abetted and ignored the housing and credit bubbles and allowed banks to keep dangerously low capital reserves and to make reckless lending decision that ruined consumers.

"From monetary policy to regulation, consumer protection, transparency and independence, Chairman Bernanke's time as Fed Chairman has been a failure," said Senator Jim Bunning, a Republican.

"We must put an end to his and the Fed's failure and there is no better time than now," he said in the debate before the final vote.

"Bernanke fiddled while our markets burned," said Senator Richard Shelby, the top Republican on the Senate Banking Committee.

Meanwhile, many senators also praised Bernanke for his unprecedented response to the financial crisis.

"Once the crisis started, he took charge in a way that was unprecedented," said Senator Kent Conrad, a Democrat. "I believe when the history of this period is written...Bernanke will prove to have been one of the heroes."

Senator Judd Gregg, a Republican, also said the Federal Reserve 's injection of 2 trillion dollars of liquidity into the economy helped avert disaster.

"He basically allowed the Fed to become the lender of the nation," Gregg said in the debate. "Nobody had ever done that. The way he did was extraordinary in its creativity, and the results were that the country's financial system did not collapse."

Last Friday, two key Democratic Senators said they would veto Bernanke's nomination, which led to speculation the central bank head might not get a second term. Stocks were battered as a result.

The White House then worked aggressively to lobby congressional support for Bernanke. Obama made calls to members of the Senate leadership and others last weekend and was assured Bernanke would win confirmation.

White House deputy press secretary Bill Burton also said Obama has "a great deal of confidence" in the actions Bernanke already has taken and believes he's "the best person for the job."

Some lawmakers also urged colleagues to approve Bernanke's nomination, warning a defeat could raise the risk of a "double dip " recession.

"To vote against confirmation could unnerve investors and exacerbate economic uncertainty in the marketplace, which is exactly what we do not need at this time," said Senator Robert Menendez, a Democrat.

"We need the wisdom of patience," he said. "Let us not judge the man or the work prematurely."

While Bernanke easily got the 51 votes needed for confirmation, he drew far more "NO" votes than any other U.S. Federal Reserve chairman in history. The previous record for most "NO" votes was Paul Volcker in 1983, when he was confirmed 84 to 16.

Bernanke has "most votes against him than any Fed Chairman has ever had. And that's a signal," Senator Richard Shelly, a Republican, told reporters after the vote. "The Fed is controversial with the American people. Bailouts. Lack of supervision over (bank) holding companies."

Editor: Yan