Bernanke wants banks to raise more
Federal Reserve chairman Ben Bernanke has urged US banks to raise more capital and be less conservative in their lending to help kick-start the US economy.
"I strongly urge financial institutions to remain proactive in their capital-raising efforts,'' Bernanke said in a speech to a Fed conference on credit markets in Chicago. "Doing so not only helps the broader economy but positions firms to take advantage of new profit opportunities as conditions in the financial markets and the economy improve," he added.
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The Fed boss said that banks have partially replenished their losses from sub-prime related problems, but are still being "rather conservative in making new loans, which has implications for the broader economy''.
"I have been encouraged by the recently demonstrated ability of many financial institutions, large and small, to raise capital,'' Bernanke commented, adding that the US central bank is considering strengthening its guidance to banks on how they cope with the aftermath of the credit crunch problems.
