In his remarks at today's Securities Industry and Financial Markets Association (SIFMA) Under Secretary for Domestic Finance Anthony Ryan said that the subprime an Alt-A markets are not solely to blame for the country's current problems.

"While some argue that this uncertainty has its roots in the subprime and the Alt-A markets, there are numerous factors to review and to understand before coming to any conclusions," said Ryan. "Credit as a whole – not just in the housing sector – has been plentiful over the past decade and we have benefited by being able to finance the spectrum of assets and services, from complex collateralized obligations, to tender option bonds, to student loans, and to household spending with credit cards."  The market is currently experiencing, he said, the consequences of this "unbridled" access to credit.

Ryan added that that the people in this country needed to strike a balance between strong market discipline and regulatory oversight, noting that they have not. "Investor confidence was undermined, illiquidity then compromised our credit markets, and now the housing and financial market turmoil has spilled over into the rest of the U.S. economy," he said.

He also noted the U.S. government's policy measures, specifically those enacted by the Treasury, the Federal Reserve, and the Federal Deposit Insurance Corp., as well as other countries around the  that have helped remove some pressures in the funding market.

For instance, he cited the Treasury implementing the temporary Money Market Mutual Fund Guarantee Program which, he said, has been well received by funds and has helped to relieve large-scale redemption pressure among money market mutual funds, which are key buyers of commercial paper.

Ryan also noted the Federal Reserve introducing three new programs as well. These are: the Asset-Backed Commercial Paper Money Market Liquidity Facility (AMLF) which offers investors the chance to sell ABCP through broker/dealers to the Fed;  the Commercial Paper Funding Facility to increase the availability of 90-day term funding for issuers of both secured and unsecured paper; and the Money Market Investor Funding Facility to further restore liquidity to the money market mutual fund industry by purchasing commercial paper, certificates of deposits, and bank notes with maturities of 90 days or less.

"The first two Fed facilities are already operational, and indications are that they too are helping to stabilize financial institutions' access to the commercial paper market," Ryan said. "Accordingly, commercial paper yields are adjusting, volumes across the maturity spectrum are expanding and maturities have lengthened, although we are still far from what might be called "normal" conditions."

Several other funding market sectors, including London Interbank Offer Rates (LIBOR), have also experienced improvements in response to the passage of the EESA and the announcement of the FDIC's guarantee of short-term bank debt.

In the longer term credit markets; however, conditions remain quite challenging and U.S. companies are finding it very difficult to issue long-term debt at attractive rates.

Mortgage markets are also continuing to experience strain. While the yield on the current coupon MBS security issued by Fannie Mae and Freddie Mac has increased, overall consumer mortgage rates have improved, and now average roughly 6.04% on fixed rate 30-year mortgages according to Freddie Mac's weekly survey, down from 6.35% before the GSEs were placed into conservatorship by their regulator, the Federal Housing Finance Agency.

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