The Department of the Treasury, the Federal Deposit Insurance Corporation, and the Federal Reserve issued a joint statement highlighting recent measures taken to bolster the financial system, making recommendations for financial institutions on how to navigate the crisis.
"The ongoing financial and economic stress has highlighted the crucial role that prudent bank lending practices play in promoting the nation's economic welfare," reads the press release. "The recent policy actions are designed to help support responsible lending activities of banking organizations, enhance their ability to fund such lending, and enable banking organizations to better meet the credit needs of households and business."
The statement calls on banks to ensure the creditworthiness of borrowers and to continue raising capital to support the financial system. It also calls on financial institutions to work with mortgage borrowers to limit the number of preventable foreclosures and said banks should be cautious of organizations that have poorly designed management compensation policies.
By Erik Kevin Franco and edited by Sarah Sussman
©CEP News Ltd. 2008