Federal Deposit Insurance Corp. Chairman Sheila Bair announced that the agency has created a program to offer economic incentives to the mortgage industry to amend loans and aid borrowers avoid foreclosures.

Speaking at the Annual Conference of the International Association of Deposit Insurers in Arlington, Virginia, Bair said, "Such a framework is needed to modify loans on a scale large enough to have a major impact."

Bair appealed for a "smarter" oversight of leveraging and a greater transparency in the financial industry. Bair also called for a major overhaul of financial regulations, describing current rules as "too balkanized."

"We need rules and meaningful enforcement of those rules that apply across the board," Bair said.

By Steve Stecyk edited by Sarah Sussman
©CEP News Ltd. 2008