Bernanke urges passage of bailout

WASHINGTON, Sept. 23 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke urged members of Congress Tuesday to act quickly to deal with "the crisis at hand" in financial markets.

In a statement prepared for the Senate Committee on Banking, Housing and Urban Affairs, Bernanke said a review of regulations was necessary "to avoid a repetition of what has transpired in our financial markets over the past year." However, he implored legislators to work first on passage of the $700 billion U.S. Treasury bailout plan.

"It is essential to deal with the crisis at hand," he said.

Bernanke said government intervention in the marketplace "should be given with the greatest reluctance." However, he said the current unraveling of financial markets amounted to "extraordinarily turbulent conditions in global financial markets."

Bernanke said placing the Federal Home Loan Mortgage Corp. and the Federal National Mortgage Association into conservatorship was necessary given the size of the companies and their "government-sponsored status" which precluded a private sector solution to their falling share prices.

A disorderly collapse of the American International Group, seized by regulators last week, would have "severely threatened global financial stability and, consequently, the performance of the U.S. economy," he said.