Federal Reserve Chairman Ben S. Bernanke said the current recession won't end until the financial system is stabilized, probably this year.
"We've seen some progress in the financial markets, absolutely. But until we get that stabilized and working normally, we're not gonna see recovery. But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time," Bernanke said in an interview aired last night on CBS' "60 Minutes."
Bernanke, who has been his position since 2006, also said that the nation's largest banks are solvent they are being closely monitored.
"I believe they are, yes. But we are doing a stress test right now, where we're looking at what the positions of the banks are under a tougher economic scenario than the one that we currently expect. And what we plan to do is to say how much capital would each bank need to be well capitalized. Not just solvent, but well capitalized, even in these more adverse scenarios."
He also said that of all the rescues and bailout the government has done over the last year, the one of insurance giant AIG made him the angriest.
"Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system," he said. "It makes me angry. I slammed the phone more than a few times on discussing AIG."
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