NY Fed President Dudley Is A Fan Of More Monetary Easing

William Dudley

New York Federal Reserve Chairman Bill Dudley expanded today on Ben Bernanke’s proposals for solving the housing crisis, offering up measures to increase lending, reform the foreclosure process and address the large overhang of “shadow inventory” on banks’ books.

Among his ideas:

  • A “broad” program of bridge loans for qualified workers who’ve been laid off
  • Tax incentives and neighbourhood “package deals” for investors as part of the the Fed’s proposed REO-to-rental program
  • Expanding refinancing programs and ironing out remaining kinks in the HARP program
  • Creating a “materiality test” for mortgages guaranteed by Fannie and Freddie to create more transparency on whether borrowers meet qualifications
  • Mortgage subsidies for veterans

But even if the government ends up not doing anything on housing, the Fed would consider taking matters into their own hands with an additional round of easing:

“I believe it is also appropriate to continue to evaluate whether we could provide additional accommodation in a manner that produces more benefits than costs, regardless of whether action in housing is undertaken or not.”

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