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Fed Issues Warning To Lenders As U S Bubble Wobbles

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WASHINGTON (Reuters) - Regulators are concerned about heavy commercial real estate exposures and risky mortgage lending practices at U.S. banks, Federal Reserve Board Governor Susan Bies said Thursday.
"There are certain rapidly growing business lines in banking operations that are placing pressures on risk-management systems," Bies told a financial services industry conference as she outlined guidance regulators have issued on commercial real estate and so-called nontraditional mortgage lending.
Bies added that regulators had observed that lenders were increasingly combining nontraditional mortgage loans with weaker controls on credit exposure.
"The absence of traditional underwriting controls may have unforeseen effects on losses realized in these products," she said.

As they say in America, No duh....

Not the kind of warning the BoE dare issue to our VIs for to do so would undermine Gordon's entry into Number 10.

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