Credit conditions have improved in the past several months but “appreciable strains” persist, Federal Reserve Bank of Minneapolis Gary Stern said on Thursday.

Stern, in a speech at the South Dakota Economic Summit in Sioux Falls, South Dakota, said that while the financial system is impaired not all borrowers were encountering difficulty in obtaining funding.

“Conversations with bankers reveal a diverse set of circumstances, ranging from ‘business as usual’ on the one hand to appreciable credit restrictions on the other,” he said. “One size clearly does not fit all.”

Stern also said that improvement in business activity is not far off, noting currently low interest rates and financial conditions which are improving unevenly.

He said that credit issues are likely to weigh on the economy for some time and the initial stage of recovery from the recession seems subdued.

“Nevertheless, in view of the policies already in place here and abroad, a resumption of growth should not be too far off, especially given the economy's fundamental resilience,” he said.