New lending rules to strengthen mortgage system: Fed

Ben Bernanke, Chairman, US Federal Reserve, said the central bank would issue new rules on mortgages next week. “The new lending facilities have helped short-term funding in the markets. It is considering raising the duration of new lending facilities. The Fed is working with the Securities Exchange Commission to evaluate the financial position of investment banks. It may extend an emergency lending for Wall Street.”

According to Bernanke, Congress might discuss new rules for the orderly liquidation of troubled companies. “Allowing Bear Sterns to fail would have been extremely adverse.”

He feels the dependence on foreign oil is dangerous to the economy.

The modernisation of the Federal Housing Administration is priority for the Fed, he said.

Bernanke said the Fed is working on new rules to improve credit card disclosures.