This isn't saying much.
National Mortgage News reported today that Bernake, making an address before the Independent Community Bankers of America annual convention, stated that Congress should limit the GSE to investing in affordable housing loans.
"Tying the portfolios to a purpose that provides measurable benefits to the public would help to ensure that society in general -- not just GSE shareholders -- receives a meaningful return for accepting the risks inherent in the portfolios," the Fed chairman said.If congress did that, I suspect the GSEs would rather give back their charters than face such a restrictive, onerous existence.Barney Frank, Democrat, somehow turns into the free market expert here and retorts that they would need a financial incentive to buy such loans.If New Century melts down, and the subprime market goes into the tank, don't you think there would be a role for an instituion like Freddie and Fannie to maintain liguidity in such a roiled market?
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