Recovery will take years

Published: February 24, 2009

Bernanke: Recovery will take years
Federal Reserve chief says full recovery from this recession will take more than two or three years.

By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke said he's hoping the recession could end later this year, but he cautioned that a full economic recovery will take "more than two or three years."

The head of the central bank said a turnaround will only occur "if actions taken by the administration, the Congress, and the Federal Reserve are successful in restoring some measure of financial stability." He also acknowledged the recovery might not go as well as hoped.

"This outlook for economic activity is subject to considerable uncertainty, and I believe that, overall, the downside risks probably outweigh those on the upside," he said in prepared remarks before the Senate Banking Committee Tuesday.

In his prepared testimony, Bernanke did not discuss his views on several plans being discussed about how to fix the nation's banking system, such as proposals to nationalize Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) or other large banks.

He also did not give any further details about when the Fed may start to buy long-term Treasury bonds, something the central bank has hinted it may start doing.

But he said that "strong government action," in addition to the financial stimulus package recently passed by Congress, is needed to fix banking and the overall economy.

Bernanke gave this forecast as part of his semi-annual update to Congress about the nation's economic condition.