Bernanke calls for banking clean-up

Ben Bernanke called for fresh efforts to clean up the US banking system on Tuesday, warning that fiscal stimulus measures alone would not be enough to overcome the economic crisis.

Speaking in London, the Federal Reserve chairman said he would like the Obama administration to combine capital injections with a plan to cut troubled assets from bank balance sheets – the idea behind the original version of Treasury secretary Hank Paulson’s troubled asset relief program (Tarp). “More capital injections and guarantees may become necessary to ensure stability and the normalisation of credit markets,” he said.
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Lawrence Summers to Head National Economic Council

President-elect Barack Obama will name former Treasury Secretary Lawrence Summers the director of his National Economic Council, placing the Harvard University economist he passed over for Treasury secretary inside the White House as his closest economic adviser, Democratic officials said Saturday night.


Presumed Democratic presidential candidate Sen. Barack Obama (D-IL) (R) greets former Treasury Secretary Larry Summers and others during a meeting with some of his top economic advisors at the Omni Shoreham hotel July 28, 2008 in Washington, DC. Obama called the two-hour meeting to discuss the current economic situation in the United States, including high gasoline prices and the collapse of the mortgage market.


The move came as the president-elect prepares Monday to introduce his new Treasury secretary nominee, Timothy Geithner, and the rest of his economic team at an event in Chicago Monday. Among those on stage will be Mr. Summers, who was central to his campaign's economic team and is now leading efforts to draft a massive economic stimulus plan the president-elect hopes to sign into law as one of his first acts as the nation's leader.

Mr. Obama has instructed his economic advisers to draft a stimulus that could dwarf the $175 billion version he campaigned on, stretching it over two years and pushing to create 2.5 million new jobs with it.

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