Is Ben Bernanke Engaging in Risky Behavior?

Struggling companies are being helped out by the policies of the Federal Reserve. The Fed has been pursuing cheap-money policies, which allow borderline companies to get low cost financing. Investors who are looking for high yield and risky bonds are.

This has been a big help to poorly rated firms, but it also a threat when these companies that might have failed otherwise can cause substantial damage when the interest rates change.

The Director of the Boston University Center for Finance, Law and Policy notes that this is what happens with a dysfunctional system and that as a result of the stalemate in Washington, the Fed ends up overcompensating.