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Lawyer: Subprime Woe Not Fed's Fault

Whodunit? Amid events like the NYSE's suspension of trade in New Century Financial shares, the subprime mortgage sector is in trouble -- and some are blaming the Federal Reserve. Rick Antonoff, partner at Pillsbury Winthrop Shaw Pittman, took on CNBC's Steve Liesman to debate the question.

Liesman, CNBC's senior economics reporter, declared that the subprime sector's problems are "Alan Greenspan's fault." Speaking on "Morning Call," he pointed out that a "very long period" of below-average rates created an environment of cheap money -- which led to "excesses."

He noted that the ripples of easy money affected government-backed mortgage giants Fannie Mae and Freddie Mac, with the latter eventually withdrawing from the subprime market. Liesman opined that "not only the Fed, but the Feds" -- i.e., federal regulators -- should've "clamped down" on overheating markets.

But Antonoff -- who represents lenders and investors in distressed and default situations -- sees it differently. He said it's "unfair" to blame the Fed, as that body has a "broader mandate" to help shepherd the national U.S. economy "in entirety" -- and cannot be expected to "micro-manage" one aspect of the economy.

Besides, Antonoff said, the government shouldn't have that responsibility anyway; instead, "it's up to [lending institutions'] management and boards to tighten up their underwriting policies" -- as the lenders themselves are "best able to judge" prospective borrowers' creditworthiness and the value of their collateral.