Charlie Rose Talks to Ben Bernanke
The former Fed chief discusses keeping Lehman’s dire state a secret and whether people should have gone to jail for the subprime crisis.
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The big headline from your book, The Courage to Act, is that you and Hank Paulson couldn’t save Lehman Brothers but obfuscated about it.
When Lehman failed, the financial system almost went into cardiac arrest. We were very worried about runs on other companies. So, for a few days, we agreed to be vague. We deflected questions. Whether it was the right decision, I don’t know. If we’d explained that we didn’t have the power, that would have created fear. People would say, “Who’s next?” There was a feeling that what we had done was arbitrary, that we’d decided to let Lehman fail and save AIG. The failure of Lehman was something we tried to avoid but couldn’t.