Open

Coming up

Don't miss

Replay


LATEST SHOWS

FASHION

Paris, Haute Couture Fall/Winter 2014-2015.

Read more

REPORTERS

Exclusive: an unlikely victim of the 'War on Terror'

Read more

AFRICA NEWS

2014-07-11 21:47 AFRICA NEWS

Read more

MEDIAWATCH

Finally, a good use for new app "Yo"

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014 (part 2)

Read more

THE WORLD THIS WEEK

The World This Week - 11 July 2014

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FRANCE IN FOCUS

Politics: parties under pressure

Read more

FOCUS

In Burma, the rise of radical Buddhism

Read more

  • UN Security Council calls for Israeli-Palestinian ceasefire

    Read more

  • Holland beat hosts Brazil 3-0 to finish third in World Cup

    Read more

  • Afghan presidential candidates agree to full vote audit, Kerry says

    Read more

  • France’s Kadri wins eighth stage at Tour de France

    Read more

  • Legal challenge to French mayor’s ban of Muslim hijab on beach

    Read more

  • Last of the Ramones, Tommy Ramone, dies aged 62

    Read more

  • Video: Outrage in wake of deadly Casablanca buildings collapse

    Read more

  • Iraqi forces ‘executed prisoners in reprisal’ for ISIS killings

    Read more

  • Ukraine promises retaliation after rebel assault

    Read more

  • Putin revives old Cuban flame and eyes Latin American minerals

    Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Cleveland's NBA fans hail 'return of king' LeBron James

    Read more

  • Exclusive: an unlikely victim of the 'War on Terror'

    Read more

  • Magnitude 6.8 quake, small tsunami hit east Japan

    Read more

  • Suspect in Brussels Jewish Museum shooting drops extradition appeal

    Read more

Business

Global growth prospects 'appear good', says Bernanke

©

Text by NEWS WIRES

Latest update : 2009-08-21

Ben Bernanke (pictured), chairman of the US Federal Reserve, said on Friday that although the recovery would be "relatively slow at first", the prospects for a return to global growth in the near term "appear good".

AFP - US Federal Reserve chief Ben Bernanke said Friday that global prospects for a return to growth from recession appeared good despite financial market strains but cautioned that any expansion would be slow at first.

"After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good," he told central bankers at a meeting in Jackson Hole, Wyoming.

Bernanke said although fears of financial collapse had receded substantially, critical challenges remained as the world grappled with a financial crisis that slammed the brakes on growth following a US home mortgage meltdown.

"Strains persist in many financial markets across the globe, financial institutions face significant additional losses, and many businesses and households continue to experience considerable difficulty gaining access to credit," he said.

"Because of these and other factors, the economic recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels," he said in his speech entitled "Lessons from a Year in Crisis."

The United States is expected to post positive growth in the third quarter after two consecutive quarters of contraction.

Germany and France, Europe's biggest economies, have bounced back with growth in the second quarter after shrinking for the previous four quarters.

The region joined the recovery underway in China and Japan and increasingly elsewhere in Asia.

Looking back at the two-year financial crisis, the US central bank chief said its effects suggested that the resulting global downturn could have been extraordinarily deep and protracted.

"Although we have avoided the worst, difficult challenges still lie ahead," said Bernanke, who took radical steps to contain the contraction of the world's largest economy, including slashing interest rates to virtually zero and pumping billions of new money into the financial system.

"We must work together to build on the gains already made to secure a sustained economic recovery, as well as to build a new financial regulatory framework that will reflect the lessons of this crisis and prevent a recurrence of the events of the past two years," he said.

He called on central bankers to "urgently address structural weaknesses in the financial system, in particular in the regulatory framework, to ensure that the enormous costs of the past two years will not be borne again."

For example, he noted that short-term funding spreads in global markets remain a problem even as short-term funding markets were stabilizing.

"Short-term funding markets are functioning more normally, corporate bond issuance has been strong, and activity in some previously moribund securitization markets has picked up," he said.

In addition, although generalized pressures on financial institutions subsided somewhat, government actions to prevent the "disorderly failures of individual, systemically significant institutions" continued to be necessary, he said.

But overall, he said, the policy actions implemented in recent months had helped stabilize a number of key financial markets, both in the United States and abroad.

"Stock prices have partially recovered, and US mortgage rates have declined markedly since last fall," he said.

Bernanke said in the United States particularly, the use of Fed liquidity facilities had declined sharply since the beginning of the year -- "a clear market signal that liquidity pressures are easing and market conditions are normalizing."

Date created : 2009-08-21

Comments

COMMENT(S)