US Federal Reserve chairman Ben Bernanke has told Congress that financial market turbulence persists and that US government officials are focused on helping the financial system regain stability.
His comments to the House of Representatives financial services committee echoed a speech he gave on Tuesday. This recommended more robust oversight of large investment banks and dealers which trade assets directly with the Fed in light of the market disruptions.
Bernanke said the Fed was co-operating with the Securities and Exchange Commission to work within existing rules, but legislation may be needed in the long-term.
His comments came as shares in US mortgage giants Fannie Mae and Freddie Mac plummeted because of concerns about their ability to get access to the capital they need to survive.
Former St. Louis Federal Reserve President William Poole said the two major US mortgage finance companies were 'insolvent' and may need a US government bail-out, according to Bloomberg News.
