Federal Reserve Chairman Ben Bernanke has been selected as TIME magazine’s famed Person of the Year for 2009 for his role in steering the country through the worst financial crisis since the Great Depression.

Richard Stengel, TIME’s managing editor, explained the decision in a letter to readers.

“We know the damage caused by the plague of subprime mortgages and the fallout from risky investment vehicles that bankers invented but did not understand,” Stengel wrote. “What we don’t know is what the economy and our lives would look like if a few individuals had not acted on our behalf and had simply sat on their hands. We don’t know what didn’t happen, but I’m convinced that the economy would look much, much worse.”

Bernanke’s academic background – a long-time professor of economics at such renowned schools as Princeton – along with his extensive study of the 1930s era, made him well-prepared to deal with the current crisis and take the actions necessary to avert disorderly panic.

“We’ve rarely had such a perfect revision of the cliché that those who do not learn from history are doomed to repeat it,” Stengel said. “Bernanke didn’t just learn from history; he wrote it himself and was damned if he was going to repeat it. Bernanke decided to do the opposite of what the Fed did back in the ’30s: he would loosen the money supply as far as it would go, he would save as many banks as he could…”

The Senate Banking Committee has approved President Obama’s nomination of Bernanke for a second four-year term as chairman of the Federal Reserve.

Bernanke’s current term ends on January 31, 2010. In the early days of his second term, the nation’s central banker will face the monumental task of pulling back the Fed’s epic intervention and rescue-mentality policies, which staved off a Depression sequel.

President Obama has credited the Republican, who was originally chosen by George W. Bush as Alan Greenspan’s successor, as “bold and brilliant in his attempts to combat the financial crisis.”