Bernanke: GSE's Had Serious Flaws Pre-Crisis

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July 17 (Bloomberg) -- Federal Reserve Chairman Ben Bernanke speaks during testimony before the House Financial Services committee.

Do you still stand by that statement?

I stand by the view that the gse's, as constituted before the crisis, had serious flaws, in terms of the employes a guarantee from the government not compensated, a lack of capital, and the fact they were torn between public and private purposes.

I agree there were a significant problem.

[inaudible] gse-type organizations are not successful to mortgage financing.

Many other industrial come -- countries have achieved ownership rates comparable to that of the united states.

One device that has been widely used was covered bonds.

Do you still stand by that statement?


As i understand it, you view it as a viable to retain a government backstop in times of great turmoil, as we saw in 2008. is this correct?

The fed has not put forward a plan.

Several economists -- that would be independent research that is not endorsed by the governors.

This text has been automatically generated. It may not be 100% accurate.


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