Consumers need more funds to "prosper"
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WASHINGTON (Dow Jones)--Senate Banking Committee Chairman Christopher Dodd,
D-Conn., said Federal Reserve Chairman Ben Bernanke promised to use "all the
tools available" to respond to volatility in the nation's financial markets.
Dodd met with Bernanke and Treasury Secretary Henry Paulson for about 30
minutes Tuesday morning to discuss the recent volatility in the financial
markets and the broader implications for the U.S. economy. Dodd said he also
spoke with Paulson and Bernanke about possible additional steps that can be
taken to help stabilize mortgage and financial markets and help homeowners
nationwide.
"I expressed the need for both the Fed and Treasury to use all the tools at
their disposal to keep our markets working and so that the business and
consumers can have the funds to prosper," Dodd said.
"Chairman Bernanke agreed," Dodd added.
Dodd, however, was frustrated with Paulson's unwillingness to consider
increasing the portfolio caps at Fannie Mae and Freddie Mac.
"The power exists today with the regulator to lift those caps," Dodd said.
Dodd added he is pleased to hear the Bush Administration say that that steps
should be taken to keep borrowers hit by the subprime lending meltdown in their
homes.
"The president's determination to keep people in their homes is a very
positive statement," Dodd said.
But, Dodd said, he is "still concerned that Treasury doesn't appreciate the
importance of this issue."
"There are some steps that can be taken right away that can minimize (the
chance of) this spilling over to other sectors of the economy," he said.
In an appearance later on CNBC, Dodd said he asked Bernanke whether "more
moral suasion" was necessary to encourage banks to take advantage of the Fed's
lowered rates on the discount window it uses to lend directly to banks.
"Sort of the general answer, and again I want to be careful here, is the
impression was that maybe a little more moral suasion might be necessary," Dodd
said. |
