Treasury: No Systemic-Risk Fears |
| Wall Street Journal - Oct 27, 2010 |
A Treasury Department official said "there is no evidence of a systemic risk" from potential repurchases of flawed mortgages by U.S. banks.
At a hearing Wednesday of the Congressional Oversight Panel, Phyllis Caldwell, Treasury's chief of homeownership preservation, said the Obama administration is monitoring the "put-back" risk of home loans packaged into securities that are being challenged by investors as a result of revelations about flawed documents.
"At this point, there is no evidence of a systemic risk," Ms. Caldwell told the panel, created in 2008 to monitor the federal government's $700 billion Troubled Asset Relief Program.
She didn't provide a loss estimate, but government officials said the Treasury Department views the potential impact as $56 billion to $64 billion, much of which already has been recognized by banks. The assessment is based on outside estimates of put-back losses by analysts ranging from $35 billion to $108 billion. Treasury officials believe banks can absorb the remaining losses.
Read Full Article from Wall Street Journal
- Posted: 2010-10-27 22:15:49
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