bernanke new crisis must be stemmed now

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WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke said Thursday that regulators must move ahead on ways to prevent a future financial crisis from occurring even as they battle one that threatens to plunge the country into recession.

"We do not have the luxury of waiting for markets to stabilize before we think about the future," Bernanke said in a speech in Richmond.

Last month Bernanke, Treasury Secretary Henry Paulson and other top economic policymakers called for stricter regulation of mortgage lenders as part of a broad effort to prevent a repeat of the credit and financial problems that have damaged the economy.

The recommendations from the presidential advisory group on financial markets cover mortgage lenders and other institutions as well as investors, credit ratings agencies and regulators.

Federal and state regulators should strengthen oversight of mortgage lenders, the presidential group proposed last month. Also, states should follow strong, uniform licensing standards for mortgage brokers. Legislation in Congress would create a nationwide licensing system.

Those recommendations were put forward after spreading problems in the housing and credit markets threatened to paralyze the entire financial system, which could be devastating to the national economy.

"Many of the necessary changes that have been identified, including increasing transparency, improving risk management and attaining better coordination among regulators could provide important support to the process of normalizing our financial markets," Bernanke said.

He said the president advisory group's recommendations, if implemented, would guard against future financial troubles.

"These recommendations should moderate the likelihood and severity of future financial shocks and enable market participants to better withstand shocks when they occur."

Fielding questions after his speech, Bernanke said that regardless of the preventative action that ultimately may be taken, "I don't think we're ever going to eliminate financial crises.............................