WASHINGTON, May 5 (Xinhua) -- U.S. Federal Reserve Chairman Ben Bernanke Tuesday ruled out the possibility of a massive new round of bailouts to save the U.S. banking giants.
I've looked at many of the banks and I believe that many of them will be able to meet their capital needs without further government capital, Bernanke told the Congress' Joint Economic Committee.
Media reported that about half of the 19 largest U.S. banks will be told to raise more capital after being stress tested by the government.
Citigroup, Bank of America, Wells Fargo and JPMorgan Chase are reported to be among those who will have to boost their reserves.
The U.S. government will release the details of the stress tests on Thursday.
Moreover, Bernanke told the Congress that the U.S. economy will begin to rebound later this year but the recovery will probably be slower than usual.
We continue to expect economic activity to bottom out, then to turn up later this year, said the U.S. central bank chief.
But he also warned that even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while.
We expect that the recovery will only gradually gain momentum and that economic slack will diminish slowly, he said. In particular, businesses are likely to be cautious about hiring, implying that the unemployment rate could remain high for a time, even after economic growth resumes.
The U.S. economy shrank at an annual rate of 6.1 percent in the first quarter of 2009, slightly smaller than the 6.3 percent drop in the previous quarter.
The worse-than-expected decline marked the third straight quarter of contraction for the world's biggest economy and signaled little improvement in a deep recession.
Looking ahead, many analysts were predicting the U.S. economy would shrink less in the current April-June period as the government's stimulus begins to take hold.
Click for more news in Biz China>>
Posts
No comments:
Post a Comment