A year after speech, Bernanke may have to eat his words

WASHINGTON -- The difference a year can make.

In August 2007, as financial markets began to crumble under the weight of bad mortgage loans, Chairman Ben Bernanke told the Federal Reserve's annual gathering at Jackson Hole, Wyo., that it wasn't the central bank's responsibility -- "nor would it be appropriate" -- to protect lenders and investors from poor decisions.

Bernanke may amend those remarks Friday morning when he addresses the same annual conference on the subject of financial stability.

Since Bernanke's 2007 address, the Fed has negotiated the last-minute sale of investment bank Bear Stearns to JPMorgan Chase, including a $30 billion loan. It has created special lending programs, providing hundreds of billions of dollars to reeling lenders and investment banks, and offered to act as a lending backstop to troubled mortgage giants Fannie Mae and Freddie Mac.

The unprecedented actions have redefined the Fed's relationship with financial ...