Paulson: No quick fix for credit crisis

Washington -- The credit-markets crisis is likely to last longer than earlier financial shocks, U.S. Treasury Secretary Henry Paulson said Tuesday.

Paulson told a breakfast sponsored by The Christian Science Monitor the market uncertainty would last longer than the Asian financial crisis of 1997, the Russian financial crisis of 1998 or the Latin American debt crisis of the 1980s.

U.S. authorities increasingly expect the uncertainty over valuing subprime mortgages could last for up to two years, The Financial Times reported.

Paulson said the turmoil's probable extended length reflected the financial-service companies' difficulties in valuing complex assets tainted by mortgage-backed securities.

"The reason it is going to take longer today (than in previous crises) is that we are more globalized," he said. U.S. mortgages had been "sliced and diced" and turning up at state-run regional banks in Germany.

But he said the U.S. economy could handle the volatility and the markets were simply engaging in a risk "repricing."

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Copyright 2007 by United Press International.