Bernanke backs second bail-out

US Federal Reserve chairman Ben Bernanke has endorsed a second fiscal package to jump-start the US economy.

In an address to the US House of Representatives Committee on the Budget, Bernanke said that with the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, it was appropriate that Congress give consideration to another fiscal package.

Bernanke said that any fiscal package rolled out by the Government should consider including measures to help improve access to credit by consumers, homebuyers, businesses, and other borrowers.

“Such actions might be particularly effective at promoting economic growth and job creation,” he said.

However, Bernanke was unclear as to how long current depressed market conditions would continue.

“The time needed for economic recovery will depend greatly on the pace at which financial and credit markets return to more normal functioning,” he said.

“Because the time that will be needed for financial normalisation and the effects of ongoing credit problems on the broader economy are difficult to judge, the uncertainty currently surrounding the economic outlook is unusually large.”