Bush offers sub-prime tax breaks

mortgage borrowers will be eligible for tax breaks as part of a package of
reforms by George W Bush.

In the US, borrowers were liable for tax on mortage debts that are written
off when they default, but the American administration has said that this burden
will be removed.

The advantages will only apply to a small proportion of the poorest
households, but concerns have been raised in some quarters that the moves will
reward people for defaulting on loans.

Speaking to an audience of bankers in Wyoming, Ben Bernanke, chairman of the
US Federal Reserve said: ‘It is not the responsibility of the Fed – nor would it
be appropriate – to protect lenders from the consequences of their financial

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