NY Fed's Dudley criticises U.S. mortgage banking concentration

Oct 15, 2012, 11:31 PM EDT
William Dudley, President and CEO of the Federal Reserve Bank of New York, speaks at a luncheon, in New York, September 24, 2012. Dudley said Monday that the dominance of a few big banks in mortgage origination was holding back the Fed's efforts to stimulate the economy because the banks weren't passing the benefits of low interests rates through to consumers.
REUTERS/Chip East

New York Federal Reserve Bank president William Dudley said the dominance of a few big banks in mortgage origination was holding back the Fed's efforts to stimulate the economy because the banks weren't passing the benefits of low interest rates on to consumers. Dudley's remarks come after the U.S. largest banks, including JPMorgan Chase, Wells Fargo, Bank of America and Citigroup, reported higher third-quarter earnings from increased mortgage lending, largely thanks to refinancings. Dudley's remarks highlight the divisions between the Fed's hawks and its doves over the inflation risk posed by the central bank's continuing effort to stimulate growth in the U.S. economy through quantitative easing.

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