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Politics : President Barack Obama
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To: TigerPaw who wrote (37279)10/9/2008 1:22:01 PM
From: Little Joe  Read Replies (2) of 149317
 
The point was that they were not maintaning adequate reserves. At a hearing before Barney Frank, Franklin Raines maintained that 3% reserves were adequate, and he claimed 2% would be safe because of the low risk nature of their loans.

Frank declined to take action, as I understand it because to do so would have meant less funds available to make the bad loans. I believe that to be a fair characterization of what occurred.

Little joe
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