Facing a challenge of global proportions

Ben Bernanke has handed the reins at the Fed to his successor but Janet Yellen faces a tricky challenge in weaning the US off quantitative easing without upsetting the global economy, writes Kyran Fitzgerald.

Last week, ‘gentle’ Ben Bernanke headed out the exit door, no doubt mopping his brow and exhaling a few sighs of relief. The chairman of the US Federal Reserve exited stage left to the sound of heavy applause.

He was, after all, a serious economic ‘actor’ who coped valiantly with the crisis so dramatically unleashed in the financial markets in September 2008, but if Bernanke acted decisively to buffer the world financial system against the fallout from the collapse of Lehman Bros, his strategy known as ‘quantitative easing’ — essentially, the opening of the financial sluice gates — has left its own share of problems in its wake.