Could recession end in 2009?

Federal Reserve Chairman Ben Bernanke says if the banking system is stabilized the recession could end later this year.

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Bernanke said that economic downturn was more severe than expected but he had no doubts about a recovery.

Deborah Lutterbeck reports from Washington

STORY:

Federal Reserve Chairman Ben Bernanke told the Council on Foreign Relations that if the banking system can be stabilized, the economic recession -- which began in December of 2007-- could come to a close within the next three economic quarters.

SOUNDBITE: US Federal Reserve Chairman Ben Bernanke, saying (English):

"If we can do that, there is a good chance the recession will end later this year and 2010 would be a year of growth."

Bernanke said that economic downturn was more severe than expected but he had no doubts about a recovery.

SOUNDBITE: US Federal Reserve Chairman Ben Bernanke, saying (English):

"We will eventually recover, the economy. The economy is too dynamic. It is a question of whether it happens quickly or less quickly."

Looking ahead Bernanke called on regulators to find a way to safeguard the entire financial system to prevent future crises like the one currently engulfing economies around the globe.

SOUNDBITE: US Federal Reserve Chairman Ben Bernanke, saying (English):

"We must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components,"

Bernanke said the current turmoil was the result of a flood of investment into the US combined with , and failure by regulators and executives to ensure that capital was carefully used.

Deborah Lutterbeck, Reuters.