Bernanke defends QE2 as G-20 gathers in Paris (by Greg Robb)
WASHINGTON (MarketWatch) -- Stung by criticism about the negative spillover effects of the Fed's $600 billion bond-buying program on the global economy, Federal Reserve Chairman Ben Bernanke issued a strong defense of the Fed's innovative monetary policy on Friday as central bankers and finance ministers gathered in Paris for this weekend's G-20 meeting. In remarks at the Bank of France, Bernanke reminded the emerging market nations that the Fed's quantitative easing program was designed to bolster the U.S. economy. "Emerging market economies have a strong interest in a continued economic recovery in the advanced countries, which accommodative monetary policies in the advanced economies are designed to promote," he said. Bernanke said the capital flows were driven by many factors not related to the Fed and "and were not out of line with longer-term trends." Bernanke said that China's decision to keep its currency artificially low has contributed "to a pattern of global spending that is unbalanced and unsustainable."