WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Monday that more programs were being developed to stimulate lending but warned a severe financial crisis is stubbornly persisting.
"While we are making progress, the journey ahead will continue to be a difficult one," he said in prepared remarks for delivery at a Fortune 500 Forum. He said the government could take no single action to end the slump but that it was trying to improve credit flows to businesses and consumers.
He said banks, whether or not they had received some of the $150 billion of capital that Treasury has pumped into the financial system, had a duty to boost lending:
"We expect banks to increase their lending as a result of these efforts and it is important that they do so."
He said that Treasury was working on additional programs to strengthen lending but offered no details. "When these programs are ready for implementation, we will discuss them with the Congress and the next administration," Paulson said.
He said the most important thing the government can do to slow the rate of home foreclosures was to make sure that mortgages were available at lower cost and professed some disappointment that they have not fallen more.
"Given that we have essentially guaranteed Fannie Mae and Freddie Mac securities, the rates on those securities -- and corresponding mortgage rates -- have not come down as much as we may have hoped," Paulson said.
(Reporting by Glenn Somerville; Editing by James Dalgleish)
