Banks still solid despite turmoil: Fed's Poole

ST LOUIS (Reuters) - St Louis Federal Reserve President William Poole on Friday said the U.S. banking system had weathered recent financial market turmoil and was continuing to lend to credit-worthy clients.

“By and large the banks are well capitalized... They are taking some losses, but that is coming out of capital, so they are taking it out of the shareholders’ hides and that is the way it should be,” Poole told a monetary policy conference hosted by the St Louis Fed.

“In the current circumstance, banks are providing credit... They are coming through on their commitments to provide back-up lines of credit... That alleviates pressure in financial markets,” he said.

Poole, a voting member of the Fed’s interest rate-setting committee this year, was taking part in a panel discussion with Fed Chairman Ben Bernanke and former Under Secretary of Treasury for International Affairs John Taylor at a conference in Poole’s honor. He retires in March.