Despite signs of financial market improvement, the Federal Reserve Board may need to consider “additional steps” to reopen credit flows and spur the economy, Fed vice chairman Donald L. Kohn said yesterday.
“The most immediate and important challenge is to take actions that will help restore the financial system to productive functioning and put our economies on a path to growth and price stability,” Kohn said, according to prepared text of the speech release by the Fed. “Government authorities and central banks have responded to the current crisis with forceful and innovative measures to rebuild confidence in the financial system, improve the ability of financial institutions to raise capital from private sources, and free up the flow of credit to businesses and households.”
“Although we have seen signs of improvement, financial market functioning remains impaired in many ways, and we will need to continue to consider whether additional steps are needed to reopen credit flows and support the economy,” he said.
