LAS VEGAS – The ongoing hearings on Capitol Hill regarding possible government intervention into the distressed mortgage market was a hot topic at WesCorp’s CU Outlook conference here Tuesday.
Most attendees agreed some form of intervention was needed to restore confidence in the financial system, and to inject much-needed liquidity into lending markets. Bob Burrell, WesCorp’s executive vice president and chief investment officer, spoke for many when he said, “There is a global crisis of confidence in the financial markets. We’ve got to have confidence to have a healthy market, and government intervention might be necessary for a healthy economy. Everyone is waiting for the other shoe to drop.”
Dwight Johnston, WesCorp’s vice president of economic and market research, told Credit Union Journal much more work needs to be done before legislation can be approved. “Clearly, the Secretary of the Treasury and the Fed were not prepared to have a plan and panicked into it,” he declared. “What they presented was so sketchy. It is contentious because there are huge, gaping holes and [Fed Chairman] Ben Bernanke is saying ‘Trust us.’ It needs to address oversight concerns before Congress passes it.”
Joe Sturtevant, founder of McLean, Va.-based RiskSpan, labeled the proposed intervention a “needed” idea, but added, “I’m dying to find out all the details.”
“In general, it is a necessary evil to restore confidence,” said Sturtevant. “The government coming in hopefully will put confidence back in the system, which is crucial.”
