Subprime losses could hit $100 billion: Bernanke | Reuters

Subprime losses could hit $100 billion: Bernanke
| Reuters

"The credit losses associated with subprime have come to light and they are fairly significant," Bernanke told the Senate Banking Committee in a second day of testimony on the Fed's twice-yearly economic report.
"Some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems," he said, referring to a segment of the mortgage market that caters to borrowers with shaky credit.
That figure may sound large, but it would represent a tiny fraction of the $56.2 trillion in U.S. household net worth. Still, many investors have worried that problems in the subprime sector could spill over into other credit markets.
In his prepared remarks, Bernanke acknowledged those concerns but pointed out that while credit spreads on lower-quality corporate debt had widened somewhat, they remain near the low end of their historical ranges. He also said inflation remained the Fed's primary concern.