Federal Reserve Chairman Ben Bernanke said Friday the credit constriction that has occurred as a result of the collapse of the housing bubble is likely to cause “long-lasting” damage.

Bernanke said efforts to expand credit availability for low income and minority people that preceded the financial crisis have now “come full circle,” with those people again facing greater difficulty obtaining loans.

Bernanke, in remarks on financial innovation prepared for delivery at a Fed Community Affairs Research Conference in Washington, D.C., said innovation is desirable but needs to be carefully regulated to prevent the kinds of problems that led to the crisis.

— Market News International

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