Fed needs to push new credit standards-investors

By Walden Siew

DANA POINT, California, Dec 2 (Reuters) - The U.S. Federal Reserve is too slow in delivering on its promises to standardize credit underwriting procedures, credit investors, reeling from the worst debt crisis in recent memory, said during a bond summit on Sunday.

The U.S. credit crisis that unfolded this summer has resulted in unprecedented losses for mortgage securities, collateralized debt obligations and jobs on Wall Street.

Louis Lucido, managing director of Los Angeles-based Trust Company of the West, said the Fed in April announced plans to come out with guidelines for standardizing underwriting for subprime mortgages, whose deterioration in value has led to billions of dollars of write-downs from Wall Street banks.

"I haven't seen it yet. This is something that needs to be done," Lucido said on Sunday at the Opal Financial Group CDO Summit. The relevance of structured debt products "is being threatened and questioned to its core," he said.

The annual summit for investors saw attendance drop off to about 700 pre-registered attendants, organizers said. The conference had a record turnout of more than 1,000 participants last year.

"We're seeing the unprecedented reduction in the financial services industry," Lucido said during the opening session. "We're seeing our friends on Wall Street in New York and throughout the world have significant downsizing."

CDO managers, trustees and rating analysts said this year's downturn in the credit cycle has been among the worst many have seen in their careers.

"I don't think I've seen any as violent as the one we're in now," said Armand Pastine, managing director of the Maxim Group, which has issued $13 billion of asset-backed security CDOs. "The standardization of subprime origination guidelines is a phenomenal idea ... We're going to need to get a certain level of confidence back to the market."

"The trend will be to simplify structures down to their core elements and move away from these complicated structures," Pastine said. (Editing by Tomasz Janowski)