Panel: Cutting Rates Could Help Ease Crisis

A panel of mortgage professionals -- including the chief executives at Fannie Mae and Washington Mutual -- have told an OTS-sponsored forum that they believe a series of interest rate cuts by the Federal Reserve could help alleviate the current liquidity crisis facing the nonconforming mortgage market."The Fed needs to keep cutting rates," WaMu chairman and CEO Kerry Killinger told the Office of Thrift Supervision housing forum, adding that "We need liquidity for the immediate future, not three years from now." Mr. Mudd said lower rates could help banks clear out their inventory of collateralized debt obligations and specialized investment vehicles. North Carolina Banking Commissioner Joseph A. Smith Jr. cautioned that too many rate cuts "could cause another mess" by adding too much liquidity.