Greenspan: Credit Crunch Persists
WASHINGTON - Federal Reserve Chairman Alan Greenspan said conditions in the banking industry are improving but a shortage of credit remains a problem.
"The underlying values of banking are improving," Mr. Greenspan told the House Banking Committee on Thursday. "We nonetheless remain confronted with a significant element of the credit crunch."
He said regulators were continuing to take gradual steps to resolve banks' reluctance to loosen credit, which he said worsened the recession.
At a White House press conference Wednesday night, when President Bush announced Mr. Greenspan's appointment to a second term, the Fed chairman said that the strength and duration of the recovery were not clear but that it is a "safe bet" the recession is over.