Bloomberg reports:
Fannie Mae and Freddie Mac grew to the point where they posed “enormous risk” to the financial system, an error that will shape how policy makers restructure the companies, Treasury Secretary Timothy Geithner said.Great moments in socialism.
“It would have been good had we figured out a way to avoid that out earlier,” Geithner told the House Financial Services Committee today. “That mistake should underpin much of what we do in thinking about how to create a more stable system.”
Fannie Mae and Freddie Mac’s size, accounting for almost half of the $12 trillion in U.S. residential home-loan debt, still pose a threat to the economy and should be supervised by a new council of regulators charged with overseeing systemic risk, Federal Deposit Insurance Corp. Chairman Sheila Bair said.
