Federal Reserve Chairman Ben Bernanke said on Wednesday that banks have been stabilized but lending remains too weak to support a healthy recovery.
We have told the banks very clearly that we want them to make loans to creditworthy borrowers, where there are borrowers who can repay the loans, Bernanke said in an interview with Time magazine.
The Fed, along with the administration and Congress, still has a lot to do to get the economy back to stability and start creating jobs again, he said.
Congress and the administration needs to develop a credible medium term interest strategy for fiscal policy, he said.
Banks need more restraint on pay after they were bailed out with taxpayer money, he said.
The central bank's Federal Open Markets Committee will conclude a two-day meeting later Wednesday with a statement expected at about 2.15 p.m.
(Reporting by Ciara Linnane; Editing by Padraic Cassidy)