Tuesday February 10, 06:27 PM
Bernanke sees improvement in credit markets
 |
WASHINGTON (AFP) - US Federal Reserve chairman Ben Bernanke said Tuesday the vast array of special central bank programs appear to have helped ease a credit crunch that has been choking economic activity.
Appearing before the House of Representatives Committee on Financial Services, Bernanke said that measuring the impact of the Fed's programs "is complicated by the fact that multiple factors affect market conditions."
"Nevertheless, we have been encouraged by the responses to these programs, including the reports and evaluations offered by market participants and analysts," he stated.
"Notably, our lending to financial institutions, together with actions taken by other agencies, has helped to relax the severe liquidity strains experienced by many firms and has been associated with considerable improvements in interbank lending markets."
Bernanke said that in the past year since the Fed and other central banks began efforts to pump liquidity into the financial system, there have been signs of improvement.
He said this is notable in the lowering of the Libor, or London interbank rate, used among banks for short-term loans. He also said corporate short-term borrowing terms have improved since the Fed entered the commercial paper market.
Additionally, he said a drop in US mortgage rates may help steady the critical housing market.
"All of these improvements have occurred over a period in which the economic news has generally been worse than expected and conditions in many financial markets, including the equity markets, have worsened," he added.
|
|
|
Send Article by Email
Send Article by IM
Blog This with Y! 360
Printable View
