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Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime Crisis

Posted on 5/8/2013

A group of bankers that advises the Federal Reserve's Board of Governors has warned that farmland prices are inflating "a bubble" and growth in student-loan debt has "parallels to the housing crisis." The concerns come from the Federal Advisory Council, which is made up of 12 bankers who meet quarterly to advise the Fed.

Their alarm adds to a debate on the Federal Open Market Committee about whether the benefits from their monthly purchases of $85 billion in bonds outweigh the risk of financial instability. While Fed Chairman Ben Bernanke has argued the program is worth pursuing, Fed Governor Jeremy Stein and Kansas City Fed President Esther George are among those who have voiced concerns that an extended period of low interest rates is heightening the risk of asset bubbles.

To read more visit: www.businessweek.com/news/2013-05-07/bankers-warn-fed-of-farm-student-loan-bubbles-echoing-subprime



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