WASHINGTON — Federal Reserve Chairman Ben Bernanke, in a confidential talk with the commission investigating the causes of the financial crisis, said he would defend to his "deathbed" his actions before the bankruptcy of Lehman Bros. Holdings.
"I will maintain to my deathbed that we made every effort to save Lehman, but we were just unable to do so because of a lack of legal authority," Bernanke said, referring to the 2008 failure that intensified a crisis that Bernanke said was the worst in history, according to an 89-page transcript of the interview by the Financial Crisis Inquiry Commission.
The record of the session, made public Monday, shows Bernanke, 57, using less-guarded language than his speeches and testimony as he answers questions from panel members. He defended the Fed's supervision of individual banks while saying the central bank was "to some extent, culpable" for not regulating subprime mortgages.
"The Fed didn't do a perfect job, but — and lots of things that we see now that can improve and are improving," he said. "But I don't think we were particularly culpable on the supervision part relative to the rest of the world."
Parts of the interview were quoted in the panel's final report, which cites the Nov. 17, 2009, "closed-door" session in 11 footnotes. The Fed chief discussed topics including the central bank's failures and why the government rescued Bear Stearns while letting Lehman go bankrupt.
The FCIC's meeting with Bernanke lasted 90 minutes and was held at the commission's eighth-floor office near the White House, according to Bernanke's daybook from the Fed.
The FCIC initially said last week the Bernanke interview would be withheld and transferred to the National Archives, which would make it public in five years. The session was originally considered confidential, and the panel sought the Fed's agreement to make it public, said Tucker Warren, a spokesman for the panel. The central bank agreed late Friday to its publication, Warren said.
Bernanke blamed "poisonous" politics surrounding the $700 billion Troubled Asset Relief Program for the failure of the government's capital injections into banks to spark lending. "The general response of bankers has been to give the money back as fast as they can; or if they have to keep it for some reason, not to base any lending on it," Bernanke said.