I think there is. The model should be too big to fail and systemically important financial institutions. Fannie is bigger than JPMorgan Chase. Freddie is bigger than Citigroup. There is no doubt.
FHFA’s Calabria has indicated there’s a role for FSOC to determine whether the GSEs should be considered systemically important, potentially opening up a new layer of debate. Bloomberg News "All large, systemically important financial institutions should be well capitalized," Calabria said at a housing event earlier this month, in speaking about his plans for Fannie and Freddie.
Chairman Crapo, Ranking Member Brown, and members of the Committee, thank you for the privilege of appearing today to share my views on whether Fannie Mae and Freddie Mac (the housing Government Sponsored Enterprises, or GSEs) should be designated as systemically important financial institutions (SIFIs).
Chairman Crapo, Ranking Member Brown, and members of the Committee, thank you for the privilege of appearing today to share my views on whether Fannie Mae and Freddie Mac (the housing Government Sponsored Enterprises, or GSEs) should be designated as systemically important financial institutions (SIFIs). I wish to make three main points:
· Why did mortgage-backed securities issued by Fannie and Freddie perform dramatically better than private label securities issued by big banks throughout the financial crisis? Why did federal regulators settle litigation cases initiated by Fannie and Freddie against major financial institutions for significantly less than what other similarly.
The authors conclude that while the described weaknesses within the chapter are important, and the structure of the GSE’s should surely be improved, it would be a mistake to assume that simply reforming the GSEs, without making significant reforms to the private-label market, would prevent another crisis.
Most recently, Mark Calabria, Director of the federal housing finance Agency (FHFA), announced that Congress should move forward with reform legislation and set a path to end the conservatorships of.
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"If Fannie and Freddie are not SIFIs, then nobody in the world is a SIFI, and if any institution is a SIFI, then so are Fannie and Freddie," said Pollock in his prepared testimony. "Addressing their systemic risk through designation as a SIFI would logically match their systemically important role and riskiness."
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