NEW DELHI -- U.S. Treasury Secretary Henry Paulson said Tuesday that the American economy is strong enough to overcome the trouble in the country's housing market although the subprime mortgage crisis may take longer than expected to resolve.
"We have a very strong global economy. We have a strong U.S. economy," Paulson told a meeting of business executives in New Delhi. "Most parts of the capital market are functioning normally."
Rising defaults in subprime mortgages - loans offered to people with weak credit histories - roiled global financial markets in August amid fears that the problems could spread to other kinds of debt and undermine global economic growth.
Paulson said authorities have been successful in containing the subprime crisis and that its impact appears to have been limited.
But he acknowledged that the subprime crisis was not yet over.
"Six months ago people were more optimistic that in the housing market we have hit the bottom. We haven't hit the bottom yet," he said. It's going to "take a while to work our way through this."
Paulson is in India on a five-day trip to meet with government and treasury officials and attend a conference of business leaders hosted by the Fortune magazine.
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