Bernanke urges bubble bursting

Federal Reserve chairman Ben Bernanke said yesterday that central banks may need to resort to monetary policy to combat asset bubbles, although regulation should be a first line of defence. "The possibility that monetary policy could be used directly to support financial stability goals, at least on the margin, should not be ruled out," he said at a conference at the Boston Federal Reserve Bank. Bernanke did not directly discuss the outlook for the US economy or monetary policy in his speech, which offered thoughts about how central banking might shift in the wake of the financial crisis.