Due to the current state of the credit markets, the ongoing recession in the U.S. is likely to persist “for some time longer,” with the initial recovery likely to be subdued, retiring Minneapolis Federal Reserve Bank president Gary Stern said yesterday.

While offering assurance that the threat from deflation will diminish as growth resumes, he warned that any attempts to address the issue of too-big-to fail institutions is doomed to failure unless they include proposals to properly align incentives.

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