The Earthtimes online News
Home

Former Fed chair Volcker: financial crisis not over

Posted : Wed, 19 Mar 2008 20:17:09 GMT
Author : Reuters
Category : US (Business)
News Alerts by Email click here )
Create your own RSS
US Business News | Home
NEW YORK (Reuters) - Paul Volcker, a former head of the U.S. Federal Reserve, said the financial crisis was not finished yet despite drastic actions from the central bank that are broadening its role in managing the economy.

In an interview with Charlie Rose on PBS television late Tuesday, Volcker said the country's troubles are the inevitable consequence of a bubble in housing that was clearly unsustainable.

"I don't think this crisis is over," he said. "It's quite a serious matter. We have seen the Federal Reserve take more extreme measures in some respects than any that have been taken in the past to deal with a financial crisis, which raises some real questions."

The Fed has pumped over half a trillion dollars into the financial system, boosted its emergency lending facilities, and pledged to take on some of the mortgage debt ravaging banks' balance sheets and causing billions in losses.

These events led to an investor-led run on the bank over the weekend that left Bear Stearns all but stripped of liquid assets.

The Fed, sensing a broader risk, stepped in to broker a buyout of the bank by larger rival J.P. Morgan, a move that Volcker said calls for greater regulatory oversight of investment firms like Bear.

"That is a new precedent," Volcker said. "Whether it's wise or not depended on how severe this crisis was and their judgment about the threat of the demise of Bear Stearns. That's a judgment they had to make, and an understandable judgment."

"If we are going to lend to them, one of the questions that arises over what happened, if we are going to lend to them and protect them, shouldn't they be regulated? I think the answer... (is) yes."

(Writing by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)


(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.



Article : Former Fed chair Volcker: financial crisis not over
Print this article
Email this article

Stay Updated
News gadget on your Google homepage
Subscribe to a news feed in Google Reader

Share on

Have your Say
Name
Email
Subject
Your Comment

Enter Verification code
 
  

 

 

More US (Business) News click here

Choose Theme
Green Earth Blue Earth Orange Earth Purple Earth

Search
 
You can
Print this articleemail this articleComment on this article

Current News

News Category
Business
- India
- UK
- US
Entertainment
Environment
General
Health
Sports
Technology
World
Press Release
Add to Google Toolbar
Breaking News
Press Releases

About us | News Archives | Browse old Archive | Feedback | Disclaimer | Mobile/PDA | News Alerts

The views expressed in the articles are not necessarily those of earthtimes.org and we accept no responsibility for the views or opinions
expressed in the articles either direct or indirect.

© 2008 www.earthtimes.org, The Earth Times, All Rights Reserved | Privacy Policy