Ben Bernanke & US Fed 01 (May 08 - Nov 10 )
Posted: Tue May 13, 2008 9:09 pm
13 May 2008 12:50 GMT
Bernanke: Financial turmoil in markets easing
WASHINGTON (AP) - Turmoil in financial markets has eased somewhat, but the situation is still "far from normal," Federal Reserve Chairman Ben Bernanke said Tuesday.
The central bank has taken a number of unconventional steps -- especially since March, when the credit crisis intensified -- to help squeezed banks and big investment firms overcome problems and try to get credit flowing more freely again.
Those efforts appear to be paying off and "have contributed to some improvement in financing markets," the Fed chief said in prepared remarks delivered via satellite to a financial markets conference sponsored by the Federal Reserve Bank of Atlanta in Sea Island, Ga.
Bernanke noted some improvements in the markets for certain mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac, as well as some fixed-rate mortgages and corporate debt.
Moreover, the Fed's extraordinary decision in March to let investment firms go to the Fed for emergency loans "seems to have bolstered confidence," Bernanke said.
"These are welcome signs, of course, but at this stage conditions in financial markets are still far from normal," he said.
For instance, there are still strains involving a widely used interest rate called the London interbank offered rate, or Libor, Bernanke said. And "funding pressures" have also been evident in the "strong participation" of commercial banks in a Fed auction program that has made billions of dollars available in short-term cash loans, he said.
Bernanke said the Fed policymakers "stand ready" to further increase the size of these loans in the future if warranted by financial developments.
In his speech, Bernanke did not talk about the Fed's next move on interest rates or the broader state of the U.S. economy, which many fear is on the edge of a recession or in one already.
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Bernanke: Financial turmoil in markets easing
WASHINGTON (AP) - Turmoil in financial markets has eased somewhat, but the situation is still "far from normal," Federal Reserve Chairman Ben Bernanke said Tuesday.
The central bank has taken a number of unconventional steps -- especially since March, when the credit crisis intensified -- to help squeezed banks and big investment firms overcome problems and try to get credit flowing more freely again.
Those efforts appear to be paying off and "have contributed to some improvement in financing markets," the Fed chief said in prepared remarks delivered via satellite to a financial markets conference sponsored by the Federal Reserve Bank of Atlanta in Sea Island, Ga.
Bernanke noted some improvements in the markets for certain mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac, as well as some fixed-rate mortgages and corporate debt.
Moreover, the Fed's extraordinary decision in March to let investment firms go to the Fed for emergency loans "seems to have bolstered confidence," Bernanke said.
"These are welcome signs, of course, but at this stage conditions in financial markets are still far from normal," he said.
For instance, there are still strains involving a widely used interest rate called the London interbank offered rate, or Libor, Bernanke said. And "funding pressures" have also been evident in the "strong participation" of commercial banks in a Fed auction program that has made billions of dollars available in short-term cash loans, he said.
Bernanke said the Fed policymakers "stand ready" to further increase the size of these loans in the future if warranted by financial developments.
In his speech, Bernanke did not talk about the Fed's next move on interest rates or the broader state of the U.S. economy, which many fear is on the edge of a recession or in one already.
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