Janet Yellen, the president of the Federal Reserve Bank of San Francisco, says the Fed still has weapons left in its arsenal to address a "severely depressed" economy.

In a speech to bankers in Hawaii on Friday, Yellen, who is also seen as an influential member of the rate-setting Federal Open Markets Committee, said: "As long as hard-to-value, troubled assets clog their balance sheets, banks find it difficult to attract private capital and to focus on new lending."

Her remarks come at a time