US Treasury 'flexible' on housing measures

US Treasury Secretary Henry Paulson indicated the Bush administration is willing to consider congressional plans to stem foreclosures by expanding government guarantees for mortgages.

"I think you will continue to see flexibility as we learn and go forward," Paulson said in an interview with Bloomberg Television.

US House Financial Services Committee Chairman Barney Frank said that the administration is increasingly sympathetic to his plan to widen mortgage guarantees.

Foreclosures jumped 60 percent last month after reaching a record rate in the fourth quarter of 2007.

Rising defaults on subprime mortgages have roiled global financial markets and worsened the housing slump in the United States, threatening the first contraction in the economy since 2001.

The International Monetary Fund yesterday cut its forecast for global growth this year and said there's a 25 percent chance of a world recession, citing the worst financial crisis in the US since the Great Depression.

Credit market turmoil poses the most severe crisis for banks in 30 years, Morgan Stanley and Oliver Wyman said in a joint report this week.

UBS AG said it will write down another $19 billion in mortgage-related assets, and Deutsche Bank AG reported another $3.9 billion of markdowns.

Banks and securities firms worldwide have reported about $232 billion in credit losses and writedowns since the beginning of 2007, Bloomberg data show.

Agencies

(China Daily 04/03/2008 page17)