Most securitization markets remain closed and some financial institutions remain under pressure despite advances in some financial markets since September, Federal Reserve Chairman Ben Bernanke told lawmakers on Tuesday.

Bernanke was addressing the effects of policy makers in the U.S. and around the world in the last quarter, according to prepared remarks he was scheduled to read before the Senate Committee on the Budget in Washington.

Historical experience strongly suggests that without a reasonable degree of financial stability, a sustainable recovery will not occur. Although progress has been made on the financial front since last fall, more needs to be done, he said.

Among the improvements, he said, were easing strains in short-term funding markets and the London interbank offered rates, or Libor, which influences interest rates faced by many U.S. households and businesses.

Commercial paper markets have improved, even for lower rated borrowers, he noted. Money market mutual funds now have modest inflows after sharp outflows in September.

Meanwhile the conforming market mortgages have seen interest rates falling nearly 1 percentage point since the Fed announced its intention to purchase agency debt and agency mortgage backed securities.

While bond spreads were still elevated by historical standards, corporate risk spreads had fallen from extraordinarily high levels.

Issuance of investment-grade corporate bonds has been strong, while speculative grade issuance has picked up somewhat, more recently after being nearly zero in the fourth quarter, he added.