Private sector must revive its central role

US credit markets will only begin to recover once the private sector reclaims its role in providing liquidity from the Federal Reserve, Kevin Warsh, a governor at the central bank, predicted.

"Public liquidity is an imperfect substitute for private liquidity," Warsh said. "Only when significant private financial actors return to their proper role at centre stage will credit market functioning and support for economic growth be fully restored."

Warsh added that the Federal Reserve's role at

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