Federal Reserve Vice-Chairman Donald Kohn (voter) said it's not yet clear if house prices in the U.S. are close to finding a bottom.

Speaking at the Brookings Institution in Washington, D.C., Kohn did say it's encouraging that the pace of declines is starting to abate in some markets. He noted that mortgage conditions are still tightening and will likely persist.

He said lenders need to build larger capital buffers, which would help offset moral hazards from expanded liquidity.

Kohn also said a transition to a safer, more resilient financial system is likely to take "a while."

By Stephen Huebl and edited by Nancy Girgis
©CEP News Ltd. 2008