Fed's Geithner Sees Few Risks Of Subprime Spillover

Turbulence in the U.S. market for high-risk mortgages is not likely to have a long-lasting effect on broader credit markets, New York Federal Reserve President Timothy Geithner said on Friday.

"The latest wave of credit market innovations has elicited some concerns about their implications for the stability of the financial system," Geithner said in prepared remarks to a credit market symposium.

"These concerns have been heightened in some quarters by problems currently being experienced in the subprime mortgage sector. As of now, though, there are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole."

Geithner reiterated his support for complex credit instruments such as derivatives as a mitigator of risk, but warned that financial institutions and regulators should constantly try to improve mechanisms for the assessment of risk.