The chairman of the US Federal Reserve has said the central bank is ready to act to limit the impact of financial turmoil on the US economy, but will not bail out investors who made poor decisions.
In a speech at a conference in the US, Ben Bernanke said the Fed was continuing to monitor the situation on the financial markets.
'It is not the responsibility of the Federal Reserve - nor would it be appropriate - to protect lenders and investors from the consequences of their financial decisions,' he added.
But he acknowledged that disruptions in markets stemming from a slumping housing market and a sharp rise in defaults among sub-prime mortgage loans could have damaging effects on the broader economy.
Mr Bernanke said the Fed wanted to avoid 'further tightening of credit conditions', which could hit consumer spending and the wider economy.
The Fed chief did not directly address the question of the next move on interest rates, but appeared to be trying to ease concerns that the bank would do nothing to prevent a broader credit crunch.
The Fed has kept its main federal funds rate at 5.25% for more than a year but on August 17 cut the discount rate for direct loans to commercial banks by a half-point to 5.75% in an effort to promote credit flows.
