GO
Loading...

Enter multiple symbols separated by commas

Fed's Pianalto Says No 'Silver Bullet' for Subprime Problems

The problems in the subprime mortgage market aren't yet well enough understood for regulators to propose a quick solution, said Cleveland Federal Reserve Bank President Sandra Pianalto.

They are complicated by the speed and breadth of financial innovations, Pianalto told a community development conference in Cleveland, and "I am convinced that there is no single solution or 'silver bullet' that will cure them."

"Within this increasingly complex mortgage market," she said, "policymakers must preserve the benefits of financial innovation while protecting consumers from unfair and abusive practices."

In the fourth quarter of 2006, Ohio had the highest foreclosure rate in the nation. But as Pianalto noted, auto industry and other economic problems probably contributed as much to that as abusive subprime lending.

Pianalto didn't say anything directly about the wider economy or monetary policy. Jeoff Hall of Thomson IFR said: "Her concerns over foreclosures can be construed as dovish, but she seems equally apprehensive about legislation that would attempt to safeguard consumers but end up quashing market forces."

Pianalto does not have an FOMC vote this year.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • Hero miles for military members: Real estate magnate's plea

    Chairman of the Fisher House Foundation, Ken Fisher, discusses the Hero Miles program with CNBC's Dina Gusovsky. During Military Appreciation Month, Fisher is asking every traveler to donate 1,000 of their miles to replenish the Hero Miles programs that is in danger of running out.

  • Cramer shuts down this market's haters

    "Mad Money" host Jim Cramer on why this market can't stop, won't stop.

  • From the battlefield to the boardroom

    Your Grateful Nation is dedicated to helping Special Forces veterans enter the corporate world and Knot Standard provides complimentary suits to vets. Mad Money's Jim Cramer spoke with Rob Clapper, Your Grateful executive director; John Ballay, Knot Standard co-founder and president; Tej Gill, retired U.S. Navy Seal; and Darren McB, active duty U.S. Navy Seal.