Krugman says worst of economic crisis over

Nobel Prize winner Paul Krugman said that,  the worst of the global economic crisis is close to end although massive lingering debts may slow down the pace of the recovery.

"I share the optimism that the worst is maybe over," Krugman said, in a speech to an international forum held in Seoul, citing credit is beginning to flow thanks to large, unconventional interventions by the U.S. Fed and other central banks.

Krugman, however, was hesitant in reaching a conclusion over the issue of recovery as there still remain problems of massive over-leveraging of financial institutions and excessive debts.

"We are left with all of that excessive debt and will have an extended process of global de-leveraging taking place," he said, highlighting "by no means are we at the end of the story." 

"Governments have to act as backstop for financial institutions," he added, calling for stricter government regulations of the financial market.