You nailed it. I remember watching AG on CNBC during one of his visits to Capitol Hill. During Q&A (not sure if Senate or House), he mentioned that lenders (banks) bore all of the interest rate risk with the large number of fixed rate loans. He thought it would be a good idea for that risk to be spread out more and talked about ARMs as the mechanism for making it occur.
I wish I had specifics on his testimony. I perused the Fed’s web site and they didn’t include the Q&A portion as part of the online archive.
When I heard this, I knew rates were going up and he wanted the banks to spread the pain.
Does anyone else have a recollection of this and some specifics?
