US Federal Reserve Chairman Ben Bernanke warned in a speech on October 19th that Asian policies promoting exports could lead to a reemergence of imbalances in trade and capital flows, which some believe helped fuel the US housing bubble. Trade surpluses achieved through policies that artificially enhance domestic saving and export industries distort the allocation of resources, he said. “To achieve more balanced and durable economic growth and to reduce the risks of financial instability, we must avoid ever-increasing and unsustainable imbalances in trade and capital flows,” he said in comments prepared for delivery to a San Francisco Fed conference on Asia. Bernanke said imbalances have narrowed following the crisis, but warned that as the global economy recovers and trade volumes rebound, global imbalances may reassert themselves. (Reuters)