Did Interest Rates Play A Role In The Credit Crisis?

From the WSJ, 1-13-2010, page A2 Bernanke Challenged on Rates' Role in Bust. Some economists think that low interest rates, as set by the FED, were part of the problem:

"In a monthly survey of mainly Wall Street and other business economists, 42 said low interest rates were partly to blame for the housing boom while 12 sided with Mr. Bernanke and said they weren't. Academic economists who specialize in monetary policy were split in a separate survey: 13 said low interest rates helped cause the housing bubble; 14 said they didn't."

"The "basic problem" was "the mistake" of raising short-term interest rates too slowly from 2004 through 2006, said Miles Kimball of the University of Michigan. "Going up quicker would have been better.""

"Some noted that low rates encouraged banks to write the riskier loans that Mr. Bernanke puts at the center of the crisis."

""There is plenty of blame to go all around," said Martin Eichenbaum of Northwestern University, expressing a commonly expressed view. "Loose monetary policy certainly contributed to easy financing, which was one element of the bubble.""