SEA ISLAND, Ga. — Federal Reserve Board chairman Ben Bernanke yesterday said there has been “some improvement” in financial markets but they are “still far from normal.”

Bernanke cited “moribund” securitization markets, “quite elevated” risk spreads, and continued interbank funding pressures. Restoring financial health is likely to “take some time,” he noted.

He said the Fed is prepared to further expand its already aggressive liquidity provisions if necessary, but said its “extraordinary” measures “will no longer be needed” once financial markets return to normal. He did not say when that might be.

In remarks prepared for the Federal Reserve Bank of Atlanta’s annual conference, Bernanke said that since the subprime mortgage crisis erupted last summer, financial strains have “shaken” a “critical foundation” of the economy.

— Market News International

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