Bernanke: More execs should have been punished for recession

Former Federal Reserve Chairman Ben Bernanke says the Justice Department should have prosecuted senior executives at investment firms whose risky actions caused the 2008 financial collapse.

Only one Wall Street executive, Kareem Serageldin, a banker at Credit Suisse, went to prison for hiding hundreds of millions of dollars in losses.

Bernanke said more individuals should have been punished, not just the financial institutions as corporate entities.

“It would have been my preference to have more investigation of individual action, since obviously everything that went wrong or was illegal was done by some individual, not by an abstract firm,” he told USA Today.

Bernanke’s comments echo critics who say the Obama administration should have focused on individual actions that caused global financial stability. They argue that punishing firms has little impact because the executives who made reckless decisions still earned millions and often left their employers after making short-sighted decisions.

“The Department of Justice and others are responsible for that, and a lot of their efforts have been to indict or threaten to indict financial firms. Now a financial firm is of course a legal fiction; it’s not a person. You can’t put a financial firm in jail,” Bernanke said.