Updated from 12:21 p.m. EDTCHARLOTTE, N.C. -- Once the financial crisis ends, the Federal Reserve has the tools it needs to tamp down inflation, Chairman Ben Bernanke said Friday at a credit market symposium. "We have a number of tools we can use to reduce bank reserves or increase short-term interest rates when that becomes necessary," he said. The Fed's outstanding balance has increased substantially, which "could complicate the Fed's task of raising short-term interest rates when the economy begins to recover or if inflation expectations were to begin to move higher," he acknowledged. Among the tools: short-term credit extended by the Fed could be wound down relatively quickly. Borrower demand for Fed credit facilities should wane, given their relatively high lending rates. The Fed can sell securities. It can also pay interest on the reserve balances of depository institutions, encouraging them to hold reserves with the Fed rather than lend into the federal funds market at a lower rate. Recently, the Fed has been forced to use its balance sheet as a tool to combat the financial crisis, Bernanke said. "We no longer live in a world in which central bank policies are confined to adjusting the short-term interest rate," he said. "Instead, by using their balance sheets, the Fed and other central banks are developing new tools to ease financial conditions and support economic growth." One result of that, said Bernanke, is that the Fed balance sheet has more than doubled from roughly $870 billion before the past year's economic crisis to roughly $2 trillion now.