Bloomberg reports:
Snow, who served at the Treasury from February 2003 to June 2006, said because Fannie Mae and Freddie Mac operated under federal charters, there's an implied guarantee of their debt that shouldn't exist. He said during his Treasury tenure he pointed out the two were ``arbitraging their lower borrowing costs that came about because of the implied status as government entity.''
and this gem from former Fannie Mae CEO Franklin Raines:
In October 2003, Snow and Fannie Mae's then-Chief Executive Franklin Raines debated in a Senate hearing whether the Treasury should have the authority over new loan products. At the time, the government-sponsored enterprises were under scrutiny from the Treasury and other regulators to because of errors in accounting.
``Congress should not open the door for the regulator to prescribe, outside the necessities of safety and soundness oversight, how the enterprises conduct their business,'
Fannie Mae,the leverage specialists.
