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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: pogbull who wrote (8561)2/24/2004 11:56:25 AM
From: Jim Willie CB  Read Replies (2) of 110194
 
Greenspan: Mortgage Debt May Be Threat
by MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON - Mortgage giants Fannie Mae and Freddie Mac could pose a threat to the country's financial system if their debt is not restrained, Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said Tuesday, urging Congress to consider capping the debt the two Fortune 500 companies can carry.

Greenspan said that the two institutions, popularly known as Fannie and Freddie, have grown to be among the largest financial institutions in the United States and now stand behind $4 trillion of home mortgages, or more than three-fourths of the single-family mortgages in the United States.

Greenspan said he believed both institutions have managed their financial risks well to date, but he said that he believed risks would rise if the two institutions allowed their debt levels to grow in the future without any restraints.

He said that "future systemic difficulties" could be considered likely and he urged Congress to take action "sooner rather than later."

With his testimony before the Senate Banking Committee, Greenspan put his considerable influence on financial matters behind a growing effort to overhaul the two institutions, which financial competitors contend have become too big and now threaten the security of the financial system.

news.yahoo.com
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