May 17, 2007, 9:00 pm PDTBernanke Plays Down Threat From Subprime Defaults

By Stephen Wisnefski and Jesse Thomas

Federal Reserve Chairman Ben Bernanke said Thursday that the financial system can withstand the fallout from the subprime-mortgage market "without serious problems." "We have spent a bit of time evaluating the financial implications of the subprime issues, tried to assess the magnitude of losses, and tried to determine how concentrated they are," Mr. Bernanke said in response to a question following a speech here. "There is a sense that, although there is always a possibility for some kind of disruption ..., the financial system will absorb the losses from the subprime mortgage problems without serious problems."....MORE