When Bernanke says low interest rates weren't the cause of the housing bubble, he is at best being disingenuous. Instead, he points to lax lending standards as the key fuel for inflating home prices.Actually, Bernanke's position is that the loose money was coming from a global savings glut, a position I agree with. The effect on lending would be the same, though. My complaint is that the Fed's low interest rates exacerbated the problem when the Fed should have been trying to counteract the problem.
But the truth is rather different.
His assertion is similar to claiming that it isn't the fall from a skyscraper that breaks your bones, but the sharp stop when your body reaches the street.
Low interest rates and lax lending standards are also closely related. They are just two symptoms of loose money. Lax lending standards were the response to healthy banks being awash with cash and most creditworthy borrowers already fat with debt.
So to put more money to work, bankers lent to increasingly dodgy borrowers. Indeed, that is what you would expect during a period of loose monetary policy.
By the way, Bernanke's reappointment has been confirmed by the senate.