Federal Reserve Chairman Ben Bernanke offered encouraging news Friday, pledging that programs enacted by the Federal Reserve to unfreeze the credit markets are working. In a speech at a symposium on Financial Markets in Charlotte, North Carolina, Bernanke praised the actions of policymakers as lowering the cost and increasing the availability of credit.

The bevy of new lending programs offered by the Federal Reserve appear to be achieving their objectives, Bernanke said, having significantly reduced funding pressures for financial institutions, helped to reduce rates in bank funding markets, and increased overall financial stability.

In the midst of extraordinarily challenging times for the financial system and economy, Bernanke stated that he is confident that growth will be restored.

The principal goal of these programs is to lower the cost and improve the availability of credit for households and businesses, Bernanke said in prepared remarks. As best we can tell, so far the programs are having the intended effect.

He also commented on the action by the Federal Reserve to support specific institutions, in order to stave off a possible outright collapse of the financial system. The decisions to assist organizations like American International Group Inc., (AIG) were very difficult, Bernanke said.

These operations have been extremely uncomfortable for the Federal Reserve to undertake and were carried out only because no reasonable alternative was available, he said.

In order to avoid similar uncomfortable situations in the future, Bernanke said that the Fed is working with Congress and the Obama Administration to develop a new system, and urged action as soon as possible.

We are working with the Administration and the Congress to develop a formal resolution regime for systemically critical nonbank financial institutions, analogous to one already in place for banks, he said. Such a regime should spell out as precisely as possible the role that the Congress expects the Federal Reserve to play in such resolutions.

Bernanke did not address current economic conditions, including the monthly employment report released today.

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