Roger Altman, CEO of Evercore Partners and former deputy Treasury Secretary, also weighed in on the events of Sunday night on CNBC. (Video at the link):
“These events of this weekend obviously are historic, they’re tragic and they’re very disturbing. It’s a little bit hard in the midst of these to figure out a solution for the entire housing business…I do agree with Alan Greenspan who said several times that financial market environment will not stabilise until markets can see home prices themselves stabilise…I’ve listened to some observations in the past few minutes about putting a floor under housing in a government-led fashion…I think that would be very difficult to do and unlikely, quite unlikely…If you think about taking the inventory of unsold homes off of the market, I think the financial magnitude of that is more than the system could do at this moment.”
CNBC asked how he recommends the government reformulate what the Treasury and Federal Reserve have oversight over.
“It’s quite clear that the Federal Reserve can’t stand behind institutions it does not regulate. That’s not a tenable position. So in the future, all institutions that have access to the discount window…will have to come under a) uniform regulation and b) uniform supervision. That will have to happen and that will have to happen by legislation. I imagine that legislation will pass next year…”
CNBC also asked him about his view on the stability of the financial system in general.
“I think highly of Morgan Stanley and Goldman Sachs so I expect them to ride this out, but as to whether we’ve seen the last of this crisis, the answer to that is clearly no…When you have Lehman and Merrill in one weekend…we’re in a very rare and very, very dangerous financial environment…I started 39 years ago, actually at Lehman Brothers, and this is the worst I’ve ever seen.”
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