Man of Many Concerns

Ben Bernanke,who was widely praised for his interview on CBS' 60 Minutes,continued to express the range of his concerns to the community bankers.Current capital rules prompt banks to reduce new lending during downturns,he complained.International efforts are underway to reduce excessive pro-cyclicality in financial regulations.The Federal Reserve's actions taken last week are intended to improve private credit market conditions.We want to be sure we can move out of credit markets when appropriate.We have steps in place to shrink the balance sheet at the right time,Mr.Bernanke informed the community bankers.

Bernanke Charts Smooth Course

Ben Bernanke,Chairman of the Federal Reserve,said there is no realistic alternative to preventing large institution failure.We need to address this problem,he told a gathering of community bankers.It is an enormous problem.It creates an incentive for small institutions to grow and themselves become too big to fail.We need to make the financial system less susceptible to exuberant booms and disastrous busts.The drop in interest rates has partially,but not entirely,lessened the effects of financial turmoil.We need something similar to the regime for bank wind-downs for non-bank entities.We are generally encouraged by the market response to our credit-related tools,the central banker remarked.