NEW YORK (Reuters) - The U.S. credit crisis has spread well beyond subprime mortgages, requiring policy-makers in Washington to take action that might prevent such troubles from resurfacing in the future, a Bush administration official said on Monday.
"Some people got put in mortgages they never should have been in," said Donald Marron, who works for the White House Council of Economic Advisers. "There's an opportunity for us in Washington to make some changes to policy so that problems like this no longer occur."
He added that downside risks to the economy remained, but saw good reason to think things would rebound in the second half of the year.
In the meantime, however, credit markets will continue to work off the excesses of the housing-led bubble that has now burst. "This process is going to take time," Marron said.
"Various kinds of structured investment vehicles and whatnot are being withdrawn or restructured in a way to try to get to what will be a more sustainable long-term financial structure."
(Reporting by Burton Frierson and Pedro Nicolaci da Costa; Editing by Dan Grebler)