Ben Bernanke laid out the Federal Reserve's vision for withdrawing liquidity from the US financial system yesterday, including increases in the interest rates it pays on reserves and market operations that could over time include the sale of mortgage-backed securities.

In written testimony to the House financial services committee, Mr Bernanke said that while a policy shift was not imminent, the US central bank had been working to make sure it was ready to move once the economy had recovered strongly enough.

“The economy continues to require the support of accommodative monetary policies,” said Mr Bernanke. “However, we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus.”