There will be no "lasting" recovery without more government action and additional money to strengthen the financial system, Federal Reserve Chairman Ben Bernanke said Tuesday.
The timing and strength of economic recovery "are highly uncertain," Bernanke told an audience in London.
In what's likely to be a sobering message to Congress, Bernanke did not say the end was near. He said that the stimulus package championed by President-elect Barack Obama would likely help the economy but wouldn't be enough on its own.
"In my view ... fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system," Bernanke said.
The next step is to get toxic assets off bank balance sheets, he said. He outlined several ways to do this, including setting up "bad banks" to hold the troubled assets, mostly mortgage debt.
As yet, the financial crisis has no end in sight, given the weak economy, Bernanke said.
Tuesday, January 13, 2009
Bernanke says banks need more money