20110826 ben bernanke testifies
Federal Reserve Chairman Ben Bernanke testifies before the Senate Committee on Banking, Housing, Urban Affairs on The Wall Street Reform Act in Washington, DC. - 

Stacey Vanek-Smith: If you think you get nervous speaking in public -- imagine how Federal Reserve Chief Ben Bernanke must be feeling. Today, he'll deliver a speech from Jackson Hole, Wyo. about the economy, and global markets will be hanging on his words. This time last year, Bernanke unveiled the massive bond buying program known as Quantitative Easing.

The BBC's Andrew Walker joins me now from London. Good morning, Andrew.

Andrew Walker: Good morning.

Vanek-Smith: So Andrew, what could Bernanke's announcement do on a global scale? And why are foreign banks so interested in this U.S. Federal Reserve policy?

Walker: Everybody has a stake in the performance of the United States economy. It's slowing down, and so everybody in the rest of the world wants to know what, if anything, the Fed is going to do to try and re-invigorate the recovery. And that will inevitably have some impact on global financial markets.

Vanek-Smith: At this time last year out of Jackson Hole, Bernanke announced a massive bond-buying program known as Quantitative Easing. How was that felt globally?

Walker: Especially for many emerging economies, one important effect was that it tended to push the value of the dollar down, and so for the value of their currencies higher. Many of them felt that in the shape of declining competitiveness, they really got worried about the prospects for their exporters. One of them, the Brazilian finance minister, even described the situation as a "currency war." So, for one reason or another, everybody in the rest of the world is watching this with a degree of nervousness.

Vanek-Smith: The BBC's Andrew Walker in London. Andrew, thank you.

Walker: My pleasure.