The Federal Reserve must be open to raising rates to pop future asset bubbles, even though stronger regulation remains the best solution to prevent a repeat of the nation's financial crisis, Fed chief Ben Bernanke said over the weekend. The nation's central banker said all efforts should be made to strengthen the U.S. financial regulatory system to prevent a repeat of a crisis that Mr. Bernanke described as perhaps the worst in modern times. "However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous build-ups of financial risks, we must remain open to using monetary policy as a supplementary tool," Mr. Bernanke told an annual meeting of the American Economic Association.
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