``From my point of view, the Federal Reserve System has essentially made no progress on the Bubble issue.  Largely absolving itself of responsibility, the Fed explains the "housing Bubble" as predominantly a failure in mortgage lending supervision and regulation.  There is no recognition that Fed monetary policy had a profound impact on the pricing and trading of mortgage-related debt instruments -- and that accommodation of a securities market speculative Bubble was a prevailing force behind the mortgage finance Bubble episode.  There has been no recognition of the profound role the Fed plays in distorting risk perceptions throughout the marketplace, in the process encouraging risk-taking and leveraged speculation.  There is no appreciation for how "activist" monetary policy has so impacted incentives (hence behavior) throughout the securities markets and financial industry overall.''

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