Fed Suggests Limits on Mortgage Portfolios

Published on:
12 September 2006 at 10:19 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00006724-fed-suggests-limits-on-mortgage-portfolio/

Federal Reserve Chairman Alan Greenspan suggested Thursday that Congress consider placing limits on the massive portfolios held by the mortgage companies Fannie Mae and Freddie Mac.

Greenspan told the House Financial Services Committee that he did not see an immediate risk to the U.S. financial system from the companies’ multibillion portfolio holdings.

But that could change, he said.

“If they continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate-risk aversion, they potentially create ever growing potential systemic risks down the road,” Greenspan said.

For this complete story, please visit Fed Suggests Limits on Mortgage Portfolios.

Fed Suggests Limits on Mortgage Portfolios

Unknown Author

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