Subprime collapse is ‘largely contained’

AUSTIN – Damage from the subprime mortgage collapse “has been largely contained,” Federal Reserve Bank of Dallas President Richard Fisher told the Austin Mortgage Bankers Association yesterday, according to Bloomberg News.
“Fortunately, the financial system and the economy are strong enough to weather this storm,” he said, adding that the packaging of many mortgages into bonds had helped to diffuse the risk.
Meanwhile, Fisher said, “Regulatory agencies are working hard to avoid causing an overreaction with credit standards that would needlessly cause too much of a slowdown in housing or the overall economy.”
Inflation remains “too high,” he told reporters after his speech, but he is “hopeful” it will moderate. He described himself as “very happy” with the Fed’s recent stance of focusing on inflation while leaving interest rates unchanged at 5.25 percent.

No posts to display