The chairman of the Federal Reserve said last night that he expects economic growth to resume in 2010. But he warned that the recovery could be wrecked if there was insufficient political will to solve the financial crisis. “We’ll see the recession coming to an end probably this year,” said Bernanke in an interview with US TV network CBS. “The biggest risk is that we don’t have the political will … the commitment to solve this problem, and that we let it just continue,” he added.
The US government will soon unveil details of a plan to mop up toxic financial assets, to encourage the sector to lend again. There is concern that this plan will reward failing banks and risk-taking firms like hedge funds, but Bernanke insisted it was essential to put the banks back on a healthier footing. “I care about Wall Street for one reason and one reason only – because what happens on Wall Street matters to Main Street,” Bernanke said. The comments follow upbeat forecasts from some of the US’s largest banks. Citigroup and Bank of America Merrill Lynch both indicated last week that they were returning to profitability – a sign that they would not need more funds from the government.
Bernanke defended the bailout of the banking sector last year, saying it had “averted” the risk of depression, although he also acknowledged public disquiet that taxpayers’ money was now supporting companies such as insurance group AIG. “It’s absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets,” he said, adding that the financial system would have suffered further if these companies had not been rescued. Anger over the rescue of AIG intensified over the weekend when it emerged that its London staff will share bonuses of $450m, despite crippling the company with huge losses on derivative contracts.
Bernanke’s optimism that the economic recovery will begin next year is not shared for the UK by accountancy firm BDO Stoy Hayward. It warned today that around 36,000 companies will be claimed by the recession in the UK this year. It said the picture will be even worse in 2010 when up to 39,000 companies are expected to fail. (guardian.co.uk)
DIarsipkan di bawah: @General News
