Although financial markets have stabilized somewhat, they “remain under considerable stress,” Federal Reserve Board chairman Ben S. Bernanke told Congress yesterday.

Short-term bank funding markets are again under pressure, he said, and lenders are reluctant to make loans to “counterparties, especially leveraged investors, and have increased the amount of collateral they require to back short-term security financing agreements.” Investors, in turn, have cut back their leverage and liquidated holdings, adding downward pressure on security prices.

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