Bernanke Speaks on Banking Industry, Need to Actively Raise Capital

At a conference on bank structure and competition in Chicago this morning, Federal Reserve Chairman Ben Bernanke underscored the need for "generous" capital cushions in light of the financial market turmoil. He also iterated that banks need to actively raise money as needed.

Published on May 15, 2008

"I strongly urge financial institutions to remain proactive in their capital-raising efforts," Bernanke said at the the conference. "Doing so not only helps the broader economy but positions firms to take advantage of new profit opportunities as conditions in the financial markets and the economy improve," Bernanke said.

Bernanke said regulators were also pushing for better disclosure by banking institutions to increase transparency and to strengthen market discipline, and blamed lax risk management practices at financial firms for contributing to credit turmoil.