JACKSON, Wyo. (AP) - Ben Bernanke sees the beginning of the end of the financial crisis.
The Federal Reserve chairman says economic activity in the U.S. and around the world appears to be "leveling out," and "the prospects for a return to growth in the near term appear good."
But while he says the economy has "avoided the worst," he warns that "difficult challenges still lie ahead."
Speaking at an annual Fed conference in Wyoming, Bernanke said financial institutions face "significant additional losses" on soured investments, and many businesses and households are still having difficulty getting loans. He says restoring the free flow of credit is critical to a lasting recovery.
Bernanke is also defending the steps taken to reverse the crisis, including the Fed's unprecedented emergency lending and the government's $700 billion bailout of banks. He says without those "speedy and forceful actions" last fall, "the outcome could have been decidedly worse."
Bernanke says there's still an urgent need to address "structural weaknesses in the financial system" and provide for stricter oversight of companies.