The Change Mariner

The Wrong Fixes For Freddie, Fannie

Forbes.com:

The management upheaval at Freddie Mac has sparked endless commentary by bureaucrats and legislators alike on how to ensure smooth operations at the company and its older sibling, Fannie Mae. But very little of the chatter gets to the root cause of the perceived problems at these publicly traded, government-sponsored enterprises.

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At their roots, the publicly traded GSEs serve two masters--shareholders and charters to facilitate home ownership. Revamped regulation must be able to balance the two. If not, perhaps it's time for the feds to open up those favorable borrowing rates and incentives to other publicly held corporations. Nothing gets a good market going like an open and level playing field.