The fiscal challenges faced by 15 southern states are the result of economic recession, balanced-budget legislation and high pension liabilities, Ben Bernanke, the chairman of the Federal Reserve, said in South Carolina on Monday.

Addressing officials from states such as Texas, Georgia and Florida, he said that tax revenues in the South had fallen "roughly 10% in 2009, similar to the average of all states". Reduced corporate profits, household spending and capital gains were responsible for the