Financial Times FT.com

Fed eyes moves to lance asset bubbles

By Krishna Guha in Washington

Published: May 14 2008 03:00 | Last updated: May 14 2008 03:00

The US Federal Reserve is reconsidering the way it deals with asset price bubbles in the wake of the housing and credit bust, in a move that could see the central bank using extra regulation - or even interest rates - to fight unjustified increases.

Top officials are re-examining the Alan Greenspan doctrine that central banks should not try to tackle asset bubbles and should focus on mitigating the fallout when they burst.

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