Former Fed. Chairman Ben Bernanke shed some light on financial panic and crises at a Princeton Univ. talk Tuesday.
PRINCETON - It's been over ten years since former Federal Reserve chairman Ben Bernanke held a position at Princeton University but he returned to lecture Tuesday - this time equipped with an insider understanding of national financial crises and a recently published book.
On Tuesday evening, Bernanke addressed a room full of students and faculty members at the university to give a lecture on the stages of a serious financial crisis and attempted to shed some light on the 2007 and 2008 financial crisis that rocked the country.
The university was an appropriate choice for Bernanke's talk. The former chairman also served as chair of the university's department of economics from the mid-1990's until 2002, according to the Princeton University website.
He has returned multiple times to speak since he officially left the position in 2005 but with his new book, "The Courage to Act: A Memoir of a Crisis and its Aftermath," which came out earlier this month, Bernanke returned again.
This time his talk - like his book - focused largely on the 2007-2008 financial crisis.
Speaking to a packed room Tuesday, Bernanke pulled examples from the 1907 and 1914 financial crises, detailing the way a trigger - like the 1906 San Francisco earthquake - can be a catalyst for a national financial disaster.
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Triggers often incite fear and uncertainty in the public who, in times of great financial panic, rush to take their money out of the bank.
"Everybody wants to hold cash," Bernanke said.
The same fear that fueled the fires of the 1907 financial crisis was prevalent in 2007 and 2008, Bernanke said.
"Fear and panic spread through a variety of financial institutions... The basic panic phenomenon still occurs."
The talk served as a kind of preview for Bernanke's book which was released on Oct. 5.
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