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Dallas Fed’s Economic Letter Reviews Richard W. Fisher’s Comments on Financial Market Strains

For Immediate Release: May 6, 2008

DALLAS—The April edition of Economic Letter features Dallas Fed President and CEO Richard W. Fisher’s views on current financial market strains coming from excesses in mortgage lending.

In excerpts from recent speeches, Fisher discusses how declining housing prices led to troubles in financial markets that had become intoxicated with new products. After explaining the Federal Reserve's response, he puts the current episode in perspective, focusing on risk, the nature of markets and concluding that "there is nothing 'unprecedented' about the situation we find ourselves in."

Excerpts include:

  • “The good news is that levels of homeownership among the U.S. population reached unprecedented heights…The bad news is that the methods used to do so were not sustainable.”
  • “Like exotic foods, consumption of new risk products can lead to indigestion, and even allergic reactions.”
  • “The Federal Reserve is doing its level best to facilitate the process of price discovery and adjustment from a period of excess in a manner that restores the efficacy of the financial system.”
  • “In building the bridge to restore financial order and efficiency, my primary interest is to do the minimum necessary to get the job done. And no more.”
  • “… to benefit Main Street, we have a duty to maintain a financial system that enables American capitalism to do its magic.”

The April Economic Letter can be found at:


Media contact:
James Hoard
Federal Reserve Bank of Dallas
Phone: (214) 922-5307