|
Fannie Statement (Sunday)
|
|
|
TSY's Paulson on Fannie, Freddie
|
|
Monday, 14 July 2008
|
On Sunday, TSY secretary
Paulson issued the following statement: "Fannie Mae and Freddie Mac play a
central role in our housing finance system and must continue to do so in their
current form as shareholder-owned companies. Their support for the housing
market is particularly important as we work through the current housing
correction. "GSE debt is held by financial institutions around the world. Its
continued strength is important to maintaining confidence and stability in our
financial system and our financial markets. Therefore we must take steps to
address the current situation as we move to a stronger regulatory structure. "In
recent days, I have consulted with the Federal Reserve, OFHEO, the SEC,
Congressional leaders of both parties and with the two companies to develop a
three-part plan for immediate action. The President has asked me to work with
Congress to act on this plan immediately. "First, as a liquidity backstop, the
plan includes a temporary increase in the line of credit the GSEs have with
Treasury. Treasury would determine the terms and conditions for accessing the
line of credit and the amount to be drawn. "Second, to ensure the GSEs have
access to sufficient capital to continue to serve their mission, the plan
includes temporary authority for Treasury to purchase equity in either of the
two GSEs if needed. "Use of either the line of credit or the equity investment
would carry terms and conditions necessary to protect the taxpayer. "Third, to
protect the financial system from systemic risk going forward, the plan
strengthens the GSE regulatory reform legislation currently moving through
Congress by giving the Federal Reserve a consultative role in the new GSE
regulator's process for setting capital requirements and other prudential
standards. "I look forward to working closely with the Congressional leaders to
enact this legislation as soon as possible, as one complete package."
 Be first to comment this article |  Add as favourites (3) |  Quote this article on your site | Views: 4
|
|
|
FED Statement on Fannie, Freddie Shore-Up
|
|
|
Monday, 14 July 2008
|
|
Fannie Mae raised $7.4
billion of additional capital in May, for a total of more than $14 billion in
new capital since November of 2007. Our capital level is substantially above
both our statutory minimum capital and the OFHEO-required 15 percent surplus
over minimum capital. In fact, we have more core capital, and a higher surplus
over our regulatory requirement, than at any time in this company's history. As
we work through this tough housing market, we are maintaining a strong capital
base, building reserves for our credit losses, and generating solid revenues as
our business continues to serve the market. We also have access to ample sources
of liquidity, including access to the debt markets. The company issued more than
$24 billion in debt this week alone, including a $3 billion benchmark note sale
that was oversubscribed. In short, Fannie Mae remains well equipped to fulfill
our critical role in the housing finance system, today and in the future. We
will provide a full financial update and outlook when we report second-quarter
results in early August. OFHEO has reiterated that Fannie Mae is adequately
capitalized, the highest capital designation given by our regulator. More
broadly, Treasury Secretary Henry Paulson and leaders in Congress have also
issued statements of support, for which we are appreciative.
Be first to comment this article | Add as favourites (2) | Quote this article on your site | Views: 4
|
|
|
