US RECESSION IS VERY LIKELY OVER: BERNANKE

Federal Reserve chairman Ben Bernanke said on Tuesday that the US recession "is very likely over" technically but that the economy may remain weak for some time.
Bernanke said the economy is likely to show growth in the third quarter after a slump that began in late 2007. "Even though from a technical perspective, the recession is very likely over at this point, it's still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was," he said. "So that's a challenge for us and policymakers going forward."
Bernanke said that there is "agreement among the forecasting community at this point that we are in a recovery," and that growth is occurring in the third quarter and will continue into 2010.
"But the general view of most forecasters is that the pace of growth in 2010 will be moderate, less than you might expect given the depth of the recession because of ongoing headwinds," he said.
Bernanke said that activity outside the regulated banking system — the so-called shadow banking system — appeared to be reviving even though that sector may be less important than before the recession. He said he saw "encouraging" signs in securitization — the repackaging of loans that are sold to investors — even in areas not supported by the Fed.
"I imagine that the shadow banking system, at least in the medium term, will not return to the size it was before," he said. "There are a lot of securitizations that have proved their viability — mostly plain-vanilla securitizations of various types, in consumer products, lending, student loans, a variety of other things.
Courtesy:- TOI dt:- 16-09-09