Connect Media > National News > Top National > FSOC Endorses FHFA Plan to Rebuild Fannie, Freddie

September 28, 2020 Comments Off on FSOC Endorses FHFA Plan to Rebuild Fannie, Freddie Views: 1207 National News, Top National

FSOC Endorses FHFA Plan to Rebuild Fannie, Freddie

Order Reprints...

The Financial Stability Oversight Council (FSOC) signed off on the Federal Housing Finance Agency’s (FHFA) plan to rebuild Fannie Mae and Freddie Mac, saying the GSEs continue to pose a potential risk to financial stability and may not be sufficiently capitalized to protect themselves against risks in their portfolios. The council reached these conclusions in a two-month review of the secondary mortgage market.

To better mitigate the risks, the FSOC recommended that FHFA implement “regulatory capital definitions that are similar to those in the U.S. banking framework” and require the GSEs to be “sufficiently capitalized to remain viable” during and after a severe downturn.

In a statement, Fannie Mae CEO Hugh Frater called the review “another important milestone in FHFA’s efforts to issue a final capital rule and safely end the conservatorships of the GSEs.” Freddie Mac CEO David Brickman similarly said the review “signifies important momentum toward exiting conservatorship.”

Pictured: FHFA director Mark Calabria.

Read the FSOC Statement

Connect With Fannie Mae

Connect With Freddie Mac

Get CRE News in 150 words

For comments, questions or concerns, please contact Paul Bubny

Tags: , , ,

Comments are closed.