Lámfalussy said ratings companies had encouraged investors to buy mortgage-backed securities at the launch of the Hungarian translation of his book ‘Financial Crises in Emerging Markets’. Though some investment institutions and banks were prudent, others took unbelievably big risks, he said.
National Bank of Hungary governor András Simor, who also spoke at the launch, said it still remains to be seen whether the US Federal Reserve will generate a new crisis with recent drastic rate cuts. He added that crises cannot always be prevented by tight monetary policy and low inflation. (MTI-Econews)
