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Frank Raines Takes On the Critics


Q: House Capital Markets Subcommittee Chairman Richard H. Baker's (R-La.) call for tighter regulation of government-sponsored enterprises, like Freddie and Fannie, is gaining momentum. So are measures to require you to register your debt with the Securities & Exchange Commission. What's your view of these proposals?

A: Freddie Mac's problems do not relate to the fact that they are a GSE. Other companies have had similar accounting difficulties, and they weren't GSEs.

What we don't want is to have things imposed on us that are going to make the housing system worse, such as registration. Registering 1,500 debt issues and 40,000 mortgage-backed securities (MBS) issuances with the SEC is a bad idea for housing. It would just stop the system. The SEC has never dealt with that number of issues.

Q: But the regulator responsible for keeping tabs on Fannie Mae and Freddie Mac, the Office of Federal Housing Enterprise Oversight, is widely seen as weak. It certainly didn't catch Freddie's problems. Doesn't that justify stronge


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