Real Estate Crisis: Where Do We Go Now?

One of the key innovators of the mortgage-backed security market blames the Federal Reserve and regulators from 2001 on for today's financial crisis.

Larry Fink is now CEO of BlackRock, a Manhattan based asset management firm. He says Alan Greenspan's policy of lowering interest rates and regulators' allowing banks to take on so much debt allowed for looser lending standards.

FINK: Congress should have been aware of it. Our regulators were aware of it. Our leverage providers created it. And our capital markets took these instruments with these new, very liberal and relaxed standards, and sold these instruments.

REPORTER: Fink spoke at NYU's annual real estate conference today. He says to stabilize the US economy, the federal government should directly subsidize new mortgages to create demand in residential real estate and prevent further deterioration of housing prices.