WHEN Ben Bernanke takes over from Alan Greenspan at the end of January, he will be filling the biggest of shoes.

For 18 years, the now iconic Fed Chairman has been the often downbeat but almost always reassuring face of American economic management.

During his almost two decades at the helm of the world’s biggest economy, the United States has not been immune from economic setbacks, but Mr Greenspan has successfully steered it through bouts of turmoil to enjoy two of the three longest periods of economic expansion in its history.

On the Greenspan watch, both growth and inflation have been less volatile than under most of his predecessors. And while the US has suffered two recessions over his tenure, those were less severe than past, painful episodes.

His record is a formidable one — and all the more remarkable given the baptism of fire that he endured when he took over from Paul Volcker.

In 1987, that handover was followed swiftly, just 72 days into his chairmanship, by Black Monday, as Wall Street saw 20 per cent wiped off share prices. Mr Greenspan kept his calm — and even slept for five hours — before quelling the turmoil with a message pledging that the Fed would guarantee liquidity to the market, coupled with soothing calls to some of the market’s biggest players.

The man they would eventually hail as the “maestro” of monetary policy went on to face down other big tests, from the Asian crisis of the mid-Nineties to the near-collapse of the 1998 LTCM hedge fund, which led to a bail-out orchestrated by the Fed.

For his critics, the lingering blot on the Greenspan copy book is that he is seen to have encouraged bubbles in asset markets. Having sounded a famed warning over “irrational exuberance” in 1996, ahead of the “dot-com” share price bubble, his continued enthusiastic advocacy of a US productivity miracle is still blamed for fomenting a bigger boom, and so a steeper subsequent slump, in Wall Street shares.

Mr Greenspan has insisted, in his defence, that the Fed should not attempt to spot and tackle asset bubbles but should do all it can to offset adverse effects if they burst. Some fear that, even now, he has left the US economy exposed to subsequent bubbles in bonds or house prices that could still implode.

Yet, from most expert observers, the overall verdict on the Greenspan years is hearty applause. It is acclamation that echoes his great popularity among ordinary Americans: something of a feat for a man who has prided himself on making his public pronouncements as hard to follow as possible.

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