Federal bank regulators demanded tougher standards for subprime loans, saying they're worried that

borrowers of adjustable-rate mortgages may not understand the risks associated with them.  Overall, many

market watchers are blaming the complacency that had seeped into markets over the past year, and especially

the U.S. market's uninterrupted run higher since last summer.  We had the longest period of market gains

without as much as a 2% pull-back since the 1950s," said Spencer Clarke's Sheldon. "Now we're going through a

period where risk tolerance levels are adapting to a normalized environment."

    Tightening credit conditions in the U.S. could worsen the downturn in the housing market and slow economic

growth further.