05 May 2009

Bernanke sees recovery ahead

Conditions in a number of financial markets have improved in recent weeks, reflecting in part the somewhat more encouraging economic data, Bernanke said. However, financial markets and financial institutions remain under considerable stress.

Conditions in a number of financial markets have improved in recent weeks, reflecting in part the somewhat more encouraging economic data, Federal Reserve Chairman Ben Bernanke said in testimony prepared for the US Congress Joint Economic Committee.

 

However, financial markets and financial institutions remain under considerable stress, and cumulative declines in asset prices, tight credit conditions, and high levels of risk aversion continue to weigh on the economy, he underlined.

 

The combination of a broad rally in equity prices and a sizable reduction in risk spreads in corporate debt markets reflects a somewhat more optimistic view of the corporate sector on the part of investors, and perhaps some decrease in risk aversion, he said.

 

There will be “significant opportunities” for capital raising outside of the government, he said. The Treasury probably wouldn’t need to turn to Congress for more money to fund the program.

 

Full speech

 

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