Bernanke suggests rate cuts are possible

NEW YORK, Oct. 15 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said Wednesday further rate cuts weren't out of the question as an upcoming monetary policy move.

"We will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity," Bernanke said in a speech at Economic Club of New York.

"We will continue to use all the tools at our disposal to improve market functioning and liquidity, to reduce pressures in key credit and funding markets."

Bernanke said the response to the financial crisis had become global "commensurate with its global nature."

Group of Seven finance ministers and central bank governors agreed in Washington "to use all available tools" to help restore financial stability, he said.

Bernanke said, "A public sector solution for Lehman (Brothers Holding Inc.) proved infeasible, as the firm could not post reasonable assurance that a loan from the Federal Reserve would be repaid."

"The Treasury did not have the authority to absorb billions of dollars of expected losses to facilitate Lehman's acquisition to another firm."

On the other hand, the recently passed "financial rescue legislation ... will give us better choices," he said.