By Jann Swanson
Posted To: MND NewsWire
The Federal Housing Finance Agency reports that the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac might together require government assistance of as much as $157.3 billion in the event of an extremely severe economic downturn. The figure comes as a result of a stress test mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act for certain financial institutions with more than $10 billion in assets, criteria which includes the two companies which are in Federal conservatorship. The test, an annual requirement, is designed to determine whether an institution can absorb losses as a result of hypothetical adverse economic conditions. The Severely Adverse Scenario involves a deep and protracted recession in which unemployment increases by 4 percentage points…(read more)
Via:: Severe Economic Downturn could Trigger GSE Bailout
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