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What GSE Subsidy?(government-sponsored enterprises)
Mr. Raines, chairman and CEO of Fannie Mae, spoke recently to the American Enterprise Institute, where he argued that the government-sponsored enterprises are not subsidized by the federal government. This viewpoint is an excerpt of his remarks.
Right now, we are hearing a lot of discussion about the secondary market in Congress as lawmakers consider ways to improve the regulatory oversight of the housing GSEs - an effort we support. As Congress has worked on this issue, however, some - including some at AEI - have sought to broaden the debate, raising fundamental questions about Fannie Mae's role in the housing finance system.
How America finances homeownership is a serious policy issue that requires a serious approach.
In that light, let's look at a few theories being advanced about Fannie Mae.
The first theory is that there is an "implied guarantee" that the government would repay our creditors if we failed.
This theory is perhaps the most fundamental point of departure for many skeptics of Fannie Mae.
Fannie Mae has a federal charter, as do 9,000 other financial institutions. Unlike many of the others, Fannie Mae does not benefit from an explicit government guarantee of our obligations.
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...list prices and yields of Fannie Mae and Freddie Mac's debt...Treasury debt. Some of Fannie Mae and Freddie Mac's special...markets' belief in an "implied guarantee," this belief has allowed Fannie Mae and Freddie Mac to borrow...
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- Magazine article from: National Review York, Byron June 19, 2006 700+ words
...mission statement. But Fannie Mae is not just any private...public perception that Fannie Mae is a rock-solid government...institution. "There is an implied guarantee," says Sen. John...legislation to reform Fannie Mae. "Investors think...
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- Magazine article from: The Economist (US) June 28, 2003 700+ words
...giants, Freddie Mac and Fannie Mae. Richard Baker, chairman...only too willing to overlook Fannie Mae's and Freddie Mac's faults...convincingly that figures in Fannie Mae's own accounts brought...costs and benefits of this implied guarantee are much debated. Alan ...
- CBO Faults Subsidies For 2 Finance Firms; Report Stokes Fannie Mae, Freddie Mac...
- Newspaper article from: The Washington Post Albert B. Crenshaw May 30, 1996 700+ words
...political consultants and "Fannie Mae, in particular, makes...controlling political risk." Fannie Mae, which formerly was...the government as an implied guarantee of repayment and thus...Washington," said Fannie Mae spokesman David Jeffers...
- Congress Looking at Fannie Mae and Freddie Mac's MBS Purchases.
- Magazine article from: National Mortgage News Collins, By Brian July 31, 2000 700+ words
Fannie Mae and Freddie Mac's practice...portfolios. As of June 30, Fannie Mae held $299 billion of its...with the government's implied guarantee. "It clearly raises their...concerns at his agency. Fannie Mae and Freddie Mac officials...
- Events At Fannie Mae Have Bearing On CUs.
- Magazine article from: Credit Union Journal December 27, 2004 700+ words
...two top executives at Fannie Mae-CEO Franklin Raines...disagreed with findings by Fannie Mae's chief regulator...miscalculation, as the spreading Fannie Mae scandal has emboldened...Treasury-the so-called implied guarantee of debt for the two...
- Big-Bank CEOs Adding Heft To Group's Assault on GSEs.(FM Watch tries to contain...
- Magazine article from: American Banker Hochstein, Marc September 23, 1999 700+ words
...its quest to contain Fannie Mae and Freddie Mac. The...said. Because of the implied guarantee from the government...tagged you." Added Fannie Mae spokesman David Jeffers...minus loans, "if Fannie Mae can say, 'we can lower...
- GSE 'Implied Guarantee' Wobbly?
- Magazine article from: National Mortgage News Sinnock, Bonnie May 17, 2004 700+ words
...reform has no rating implications for Fannie Mae, Freddie Mac or the Federal Home Loan...relative to J&J bonds, he said. A Fannie Mae spokesman contacted about this story...However, at a UBS conference last week, Fannie Mae chairman and chief executive officer...