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Stabilization of the financial markets is a critical first step, Bernanke said, but even if they stabilize as we hope they will, broader economic recovery will not happen right away.
Bernanke made clear that “the turmoil in financial markets and the funding pressures on financial firms pose a significant threat to economic growth.”
However, he also said that government now has the tools it needs to confront and solve the problems. “Our strategy will continue to evolve and be refined as we adapt to new developments and the inevitable setbacks”, he said.
“We will continue to use all the tools at our disposal to improve market functioning and liquidity, to reduce pressures in key credit and funding markets, and to complement the steps the Treasury and foreign governments will be taking to strengthen the financial system.”, Bernanke underlined.