Fed's Fischer says more to be done to prevent future crises


June 20 (Reuters) - Federal Reserve Board Vice Chair Stanley
Fischer on Tuesday warned that while the U.S. and other
countries have taken steps to make their housing finance systems
stronger, more needs to be done to prevent a future crisis.
    Fischer did not address the outlook for U.S. monetary policy
or the economy in remarks prepared for delivery to the
DNB-Riksbank Macroprudential Conference Series in Amsterdam.
    Instead he focused on preventing financial instability,
arguing that since the 2007-2009 financial crisis in the United
States, "the core of the financial system is much stronger, the
worst lending practices have been curtailed, much progress has
been made in processes to reduce unnecessary foreclosures," and
a 2008 law helped clarify the status of government support for
housing agencies Fannie Mae and Freddie Mac.
    But to prevent a new crisis, he said, governments ought to
do more, including stress tests for banks on their resilience
should house prices decline dramatically, and making it easier
to avoid foreclosures, which hurt both lenders and borrowers.
    "(T)here is more to be done, and much improvement to be
preserved and built on, for the world as we know it cannot
afford another pair of crises of the magnitude of the Great
Recession and the Global Financial Crisis," he said.

 (Reporting by Ann Saphir; editing by Diane Craft)
 ((Ann.Saphir@thomsonreuters.com; 415-677-2516;
www.twitter.com/annsaphir; Reuters Messaging:


This article appears in: Politics , Stocks , World Markets , Economy

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