Bernanke Says Recession Likely Over This Year

Washington, DC, March 16, 2009--Federal Reserve Chairman Ben Bernanke said the recession will likely end this year if the government succeeds in bolstering the banking system.

In a television interview with "60 Mintues" Bernanke stressed that the prospects for the recession ending this year and a recovery taking root next year hinge on getting banks to lend more freely again and getting the financial markets to work more normally.

"We've seen some progress in the financial markets, absolutely," Bernanke said. "But until we get that stabilized and working normally, we're not going to 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."

Even if the recession, which began in December 2007, ends this year, the unemployment rate will keep climbing past the current quarter-century high of 8.1 percent, Bernanke said.

Asked about the biggest potential dangers now, Bernanke suggested a lack of "political will" to solve the financial crisis.

He said, though, that the United States has averted the risk of plunging into a depression.

"I think we've gotten past that," he said.

Bernanke said he believes all the big banks the Fed regulates are solvent. Big banks won't fail under his watch, Bernanke said — though, if necessary, the government should try to "wind it down in a safe way."