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Speaking at the Georgetown Law Center, US Treasury Secretary Paulson reviewed the current state of the housing and mortgage markets and outlined the implications for the capital markets and the economy. “The ongoing housing correction is not ending as quickly as it might have appeared late last year”, he said. “And it now looks like it will continue to adversely impact our economy, our capital markets, and many homeowners for some time yet”.
Paulson stated that the housing decline is still unfolding representing the “most significant current risk” to the
“The real irony is that the material problems arising in recent months were in regulated institutions in certain markets”, Paulson said. The US Treasury and the President's Working Group are conducting a comprehensive review of policy issues.
“First, it is clear that we must examine the role of credit rating agencies. We must also assess if regulations and supervisory policies are encouraging an over-reliance on ratings by financial institutions and investors”, Paulson explained. “Second, we must continue to address financial institution risk management and related regulatory issues.”