Top U.S. Regulator: Banks, Housing on Path to Recovery

FDIC Chairwoman Sheila Bair said at a financial reform conference on Thursday that banks and the U.S. housing market are “past the crisis stage and are now on a path to recovery.”

From Reuters: The financial system has been through a tough 18 months, she said, but she expressed optimism about the future….”I think long-term, the prospects for banking are good,” she said.
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Bair also said she was seeing “glimmers of hope” in the housing market, especially in California.

She [attributed] the recent uptick in foreclosures…[as a result of] the lifting of temporary moratoriums on such activity, but expects relief will come from the Obama Administration’s loan modification program.

Bair [also] said the FDIC hopes to have a pilot sale for its legacy loan program in early June, and anticipates that the sale will be in the range of about $1 billion of banks’ distressed loans.

The legacy loan program is part of the bigger Public-Private Investment Program, which is designed to take up to $1 trillion of troubled assets off banks’ balance sheets.