ATLANTA, (Bloomberg) The U.S. will avoid an extended economic slump similar to Japan's in the 1990s as banks recognize losses faster than their Japanese counterparts did, Federal Reserve Bank of Atlanta President Dennis Lockhart said Wednesday.
"I do not expect this country to experience the same protracted economic weakness as Japan, in part because we can learn from Japan's experience," Lockhart said in a speech to the Japan-America Society of Georgia.
Lockhart echoed the view of Federal Reserve Board Chairman Ben Bernanke, who said in an April speech that the slow recognition of losses by Japanese banks lengthened their nation's economic crisis.
"Affected financial companies are already well into the process of loss recognition and recapitalization," Lockhart said. "In the coming months and years, we can expect substantial improvements in the area of risk and liquidity management even to the extent of fundamental changes of their business models."