Possible double Dip?
The situation is bad enough that Federal Reserve Chairman Ben Bernanke felt the need to enumerate all the ways the central bank can still boost the economy in addition to lowering interest rates (short-term interest rates have been near zero for more than 18 months). The Fed already has launched another round of money printing, resurrecting a strategy that was initiated in March 2009 and ended last spring. The Fed chief said bailing out these institutions is not a healthy solution and that great improvement will come from the new financial overhaul law. It empowers regulators to shut down firms whose collapse pose a broader threat to the system."Too-big-to-fail financial institutions were both a source ... of the crisis and among the primary impediments to policymakers' efforts to contain it," Bernanke told the bipartisan panel."We should not imagine ... that it is possible to prevent all crises," he said. "To achieve both sustained growth and stability, we need to provide a framework which promotes the appropriate mix of prudence, risk-taking and innovation in our financial system."