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Bernanke: Economy should grow again later in 2009

(Agencies)
Updated: 2009-05-06 00:11

On the financial front, Bernanke said there have been signs of improvements in easing some credit stresses. However, financial markets remain under considerable strain.

Related readings:  Bernanke: Economic weakness to continue  Paulson, Bernanke defend financial rescue strategy  Bernanke breathes life into another stimulus bill  Bernanke says more government stimulus 'appropriate'  Bernanke says another US stimulus plan may be needed

Bernanke didn't provide details about how 19 large banks fared on "stress tests." Results, to be released Thursday, should shed light on which banks may need government support if the recession were to worsen.

He did say that after the results are released, banks will be required to develop "comprehensive capital plans for establishing the required buffers" to protect against future losses. They will have six months to execute those plans or get help from the government.

Bernanke said there are "significant opportunities for capital raising outside government programs," and that many banks should be able to do so by selling assets or taking other steps.

The International Monetary Fund estimated that $275 billion more in capital would be needed to cushion against further losses at US banks. While refusing to provide any numbers, Bernanke said he thought the IMF's figure overestimated any additional capital needs.

Responding to lawmakers' concerns about secrecy in its lending and bailout programs, Bernanke said the Fed will start providing information on the number of borrowers under each plan, details of credit extended and information on the collateral put up for the loans.

But Bernanke didn't say the Fed would release the identity of borrowers, something lawmakers have pushed for.

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