Though the financial crisis appears "mostly behind us," with the economy stabilizing and showing some growth, the U.S. faces "daunting" challenges on the economic front, Federal Reserve Board chairman Ben S. Bernanke said yesterday.

"Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable," Bernanke told the Dallas Regional Chamber, according to prepared text of his remarks released by the Fed.

"However, nothing prevents us from beginning now to develop a credible plan for meeting our long-run fiscal challenges," he said.

"Indeed, a credible plan that demonstrated a commitment to achieving long-run fiscal sustainability could lead to lower interest rates and more rapid growth in the near term."

Bernanke also called for "tough new rules to make financial institutions safer and to constrain excessive risk-taking."

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