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Paulson Sees Credit Crisis Easing

The Treasury secretary said 'the worst is likely to be behind us' but warned 'bumps along the road' remain.

Treasury Secretary Henry Paulson said the "worst is likely to be behind us" in the lingering credit crunch in an interview published Wednesday in

The Wall Street Journal


Paulson said it would take several months more to sort out the full effects of the credit markets' disruptions that began last summer and further "bumps along the road" remain, the



But he pointed to actions by the

Federal Reserve

-- including the central bank's aid to

JPMorgan Chase

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in buying a near-bankrupt

Bear Stearns


in March and unprecedented actions to provide liquidity to commercial and investment banks -- as soothing to the markets, the paper said.

On the political front, Paulson urged Congress to approve legislation improving the regulation of government-sponsored mortgage lenders

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Fannie Mae



Freddie Mac


, the



That comes as the White House signaled it would veto a bill sponsored by Democrats that would provide Federal Housing Administration insurance for $300 billion in troubled mortgages.

Treasury also met with about 10 home lenders, including

Countrywide Financial



Bank of America

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to urge them to standardize voluntary procedures for helping qualified borrowers modify existing mortgages into more affordable terms, the


reported Tuesday.

This article was written by a staff member of