They Created a Global Financial Crisis of As Yet Unknown Proportions, but Now the U.S. Federal Reserve “Proposes Rules to Protect Would-Be Homeowners”
December 19th, 2007And Goldman Sachs sails off into the sunset…
Goldman Sachs, which made a successful $4 billion (£2 billion) bet that the US sub-prime mortgage market would spark chaos, beat expectations today on both fourth-quarter and annual profits.
…That is, after shorting the garbage they peddled in the first place.
Via: International Herald Tribune:
The Federal Reserve moved Tuesday to impose tough new restrictions meant to curb unfair and deceptive home-lending practices and prevent a recurrence of the meltdown in subprime mortgages this year.
By a 5-to-0 vote, the Fed approved a plan that would tighten provisions meant to protect borrowers and apply them to a far larger share of home loans – whether from banks, mortgage companies or other lenders – than under current regulations.
The proposed rules underscore the more assertive role the Fed is now prepared to take in regulating lending, a big shift from the central bank’s approach in the past. In general, the rules are meant to deter unscrupulous lenders from persuading people that they can afford loans that ought to be out of their reach. By extension, the rules are also intended to keep would-be buyers from deceiving themselves about the debt burdens they can shoulder.
“Our goal is to promote responsible mortgage lending, for the benefit of individual consumers and the economy,” said the Fed chairman, Ben Bernanke.
“We want consumers to make decisions about home mortgage options confidently, with assurances that unscrupulous home mortgage practices will not be tolerated.”
