US Federal Reserve chairman Mr Alan Greenspan has said there are now signs that recent investor anxiety, which had tightened credit availability, is abating.

Addressing a meeting of the Securities Industry Association in Florida via satellite yesterday, he said the "fear and retrenchment" that was evident among investors in Asia had also affected those in Europe and the United States.

"It is, of course, plausible that the current episode of investor fright will dissipate, and yield spreads and liquidity premiums will soon fall into more normal ranges," Mr Greenspan told the conference, speaking from Washington.

"Indeed, we are already seeing significant signs of some reversals."