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NY Fed President: I Have 'Sympathy With the Anger' Felt By Protesters

Monday, October 24, 2011

Anger at the Federal Reserve’s role in bailing out Wall Street banks is one of the many reasons protesters have rallied and camped out at Zuccotti Park in Lower Manhattan.

And just a few blocks away, at the Federal Reserve Bank of New York, its chief executive, William Dudley said he understands.

"I have some sympathy with the anger that the people at Occupy Wall Street have," he told WNYC before giving a speech at Fordham University in the Bronx on Monday.  "There is a fundamental unfairness about what happened: the banks were rescued, yet the economy suffers with a very, very high unemployment rate."

The New York Fed played a key role in managing the bailout programs that were created in 2008 at the height of the financial crisis. 

Dudley said that now the focus shouldn’t be on what happened, but on how to make the economy healthier going forward. He stressed a number of steps that need to take place — from the fixing the housing market to getting leaders in Washington to take concrete steps to address the nation’s long-term financial situation. 

 "If we can get the housing sector going, that is going to be very, very important not just for the housing sector itself but that will also support household confidence, household wealth, make people feel a little bit more confident about going out and spending," he said.

It’s one track President Barack Obama seems to be following.

On Monday, the administration announced new rules to an existing program to help homeowners refinance their mortgages.  The changes will make it easier for homeowners who owe more than their homes are worth to take advantage of the near record-low interest rates and reduce their monthly payments. 

Dudley said the path to economic growth will also depend on Congress and the White House working together to address the nation’s long-term fiscal challenges.  He said he’s looking forward to seeing the proposals issued by the "Super Committee," the 12-member group of legislators from both sides of the aisle charged with finding over a trillion dollars in budget savings.  He added that beyond the specific recommendations, the bigger issue moving forward will be showing that both parties can work together. 

"This is something that needs to happen and if it does happen, I think it has huge consequences for household and business confidence, so it's not just what they do and propose, but if they can just get to an agreement that will make people feel more confident about Washington," Dudley said.

The Special Committee must vote on its recommendations by November 23.  The House and Senate then have a month in which to act, or else automatic cuts will be made to defense and discretionary spending.

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