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.