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Fed boss Bernanke faces personal downturn

Federal Reserve Chairman Ben Bernanke says his net worth dropped by almost a third last year.
Image: Ben Bernanke, Sheila Bair, John Dugan
Bernanke says in a financial disclosure form that he owned assets worth between $850,000 and $1.9 million in 2008.J. Scott Applewhite / AP
/ Source: The Associated Press

If your investments didn’t do so well last year, don’t feel so bad: neither did Fed Chairman Ben Bernanke’s.

The nation’s top financial official saw his net worth fall by more than a quarter in 2008, to between $850,000 and $1.9 million, according to an annual disclosure form released Tuesday.

While still substantial, that’s down from the $1.2 million to $2.5 million he reported for 2007.

Bernanke, who has had to grapple with a financial crisis brought on in part by complex investment products, keeps his assets in plain vanilla vehicles such as retirement plans, mutual funds and savings accounts.

He has a money market account with between $50,000 and $100,000, according to the disclosure form, which asks only for broad ranges for the values of holdings.

The Fed chairman, a former economics professor at Princeton University, has most of his wealth in two annuities managed by TIAA-CREF, which provides retirement savings plans for academic institutions and other nonprofits.

Still, Bernanke did better than the stock market as a whole last year, which plummeted as the housing and credit crises sent the economy into a steep recession. The broad S&P 500 index fell almost 39 percent in 2008.

The Fed has taken a leading role in combating the downturn, slashing the interest rate it controls to nearly zero and pumping trillions of dollars into the financial system. That has brought increased scrutiny of the central bank from Capitol Hill.

Many lawmakers have complained that little information is available about the Fed’s efforts.

Bernanke has responded by increasing his public outreach. He participated in a one-hour town hall meeting Sunday in Kansas City, Mo., hosted by public television’s Jim Lehrer, and also appeared on CBS’ “60 Minutes” in March.

Bernanke reported income from his investments of between $25,000 and $80,000 last year, also down substantially from 2007, when he earned between $141,500 and $333,100.

But he reported higher royalty income from two textbooks he wrote. Bernanke earned between $50,000 and $100,000 on one book and between $100,000 and $1 million on the second, up from $50,000 to $100,000 on both books in 2007.

Bernanke earned $191,300 in 2008, and will see a boost in salary to $196,700 this year.

The value of one of his annuities — CREF Stock Large Cap Blend — was between $250,000 and $500,000 last year, according to the form, down from $500,000 to $1 million the previous year.

Bernanke listed no individual stocks or corporate bonds among his holdings.

The chairman and other Federal Reserve board members are not allowed to own stock in banking organizations or shares of mutual funds specializing in banking and finance. Other holdings generally are permitted.

The Fed Chairman has small amounts invested in two BlackRock mutual funds and one Vanguard fund.

Bernanke’s term expires early next year, and President Barack Obama will have to decide whether to reappoint him. The Fed chief’s innovative policies have been credited with pulling the economy from the edge of the abyss last year.

But those actions also have touched off criticism about putting taxpayers at risk and whether the government should be cleaning up Wall Street messes.